Career Shifts At Yale Boost MBA Pay

Senior Associate Dean Anjani Jain at Yale School of Management

Senior Associate Dean Anjani Jain at Yale School of Management

Graduating MBAs from Yale University’s School of Management last year saw their total median first-year compensation packages rise by 8.8% to a record $146,514, from $134,618 a year earlier. That’s one of the more substantive increases among SOM’s peer schools, fueled by both rising market demand for top MBA talent but also an underlying shift in career preferences among Yale’s graduates.

Long known as an institution that produced a higher share of MBAs who ventured into the social sector than other business schools, SOM’s employment stats are looking more like other MBA programs. Last year, MBAs who accepted jobs in both the non-profit and government sectors fell to a low 4.8%, less than half the 10.4% level of only two years ago. At 4.8%, SOM is looking more like Harvard Business School, which placed 4% of its MBAs into non-profit and government jobs, and is now behind Stanford’s Graduate School of Business, which saw 6.0% of its Class of 2015 enter those fields.

To be sure, SOM’s percentage is still much higher than such finance schools as Columbia, where only 1.8% of MBAs accepted non-profit and government jobs last year, or Wharton, where the “social impact” percentage was just 2%. But SOM’s decline from 7.8% only last year and the 10.4% of 2013 is helping the school close the salary gap with its peer institutions. That’s especially so because the most sizable industry gains have been recorded by the consulting firms which pay MBAs considerably more money to start. Last year, 29.3% of Yale’s class went into consulting, up more than seven percentage points from the 22.0% that accepted offers from consulting two years earlier.

JOB OFFERS AND ACCEPTANCES ALSO UP IN 2015

SOMers who took jobs in consulting reported median starting pay of $135,000 plus median other guaranteed compensation, mainly in sign-on bonuses, of $30,000. That is nearly double the median base of $83,500 paid to MBAs who took non-profit positions, where the lowest reported salary was just $60,000. The shift almost certainly contributed to a larger increase in the total comp packages given to Yale’s MBAs last year.

The $146,514 median includes median base salaries for the class of $120,000, up $10,000 from a year earlier, as well as median “other guaranteed compensation,” received by 76.5% of the class, of $34,616, roughly even with the year-earlier $35,000 guarantee received by 69.2% of the class. SOM reports sign-on bonuses in its “other guaranteed comp” number, preferring not to break those two elements of pay out separately as most other schools do. Median base salaries at SOM have risen by 20% in the past three years alone. The 2015 data was reported by 225 of the 244 graduates in the Class of 2015 who sought employment.

The first-year total pay packages now put Yale firmly in the company of Columbia Business School, Wharton, and Dartmouth Tuck but still behind Stanford, Harvard and MIT Sloan, among other schools.

The school’s employment stats also have steadily improved since the Great Recession. Three years ago, in 2012, just 89.0% of the graduates had job offers three months after graduation and just 85.5% had accepted their offers by that time. Last year, 93.4% of Yale’s MBAs reported job offers three months after commencement, with 92.2% of the class accepting those positions—an increase of nearly seven full percentage points.

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