Where MBAs Can & Can’t Negotiate Pay

When current Chicago Booth School of Business MBA candidate Cristina Costa was introduced to software startup Ionic, it was professional love at first sight. And the sentiment was mutual. At the time, the early-stage startup in Madison, Wisconsin, had fewer than 20 employees and was led by designers and programmers. After three years at Deloitte, Costa had left to work for several early-stage software startups in the San Francisco Bay Area, making her an MBA already adept in the intricacies of software and app development — a coup for the Midwestern venture. The problem? How would an early-stage startup compensate an elite MBA in a fair way?

To be sure, the questions piled up for Costa. “How much equity is it appropriate to ask for? How much salary do I ask for? Is it an hourly rate? Technically, I’m part-time, but I’m working more than 30 hours a week. It was a really ambiguous space,” she explains, noting those types of conversations at early-stage startups can often feel like the “blind leading the blind.”

And there was the sensitivity of asking a fledgling venture for money. “I really wanted to be fair,” Costa says. “Because I plan on being at this company until we either go down in flames or we exit.”

Through the help of the Chicago Booth alumni network and data provided by TransparentMBA, a jobs platform specifically for MBAs, Costa was able to navigate a part-time internship last January and eventually a full-time offer from Ionic. “Having the data helped me feel like I wasn’t being an asshole and was doing what everyone else was doing and going after what I deserve,” Costa says. It definitely paid off. She was able to score a 50% base salary increase as well as significant equity, despite Ionic only having a seed round raised at the time. “You don’t want to ask for too much, but you also don’t want to be doing slave labor,” Costa says of the delicate balance.


According to the TransparentMBA data — released exclusively to Poets&Quants — some 300 recently graduated MBAs have negotiated a combined $2.7 million since April. On average, the self-reported TransparentMBA data shows MBAs were able to net an average $8,881 beyond their initial base salary offers. The data includes anything beyond a base salary offer, including equity, vacation, relocation, and other data points.

While the averages and total amounts are frothy, industries and job functions are certainly not created equally. Mainstream MBA employers are generally not keen on MBAs asking for more. According to the data, investment banks are 90% less likely than the cross-industry average to wheel and deal with their freshly minted MBAs. That’s less than any other industry including the federal government, which is 83% less likely than the cross-industry average to negotiate their MBA hires. Up next for industries willing to refuse negotiations is commercial banking, at 79% lower than the average. Consulting, meanwhile, does better, but is still 29% less than the industry norm.

Costa’s story seems like it should be typical, as software-focused tech companies are 2.17 times more likely to negotiate MBA offers than the baseline. Outside of the hospitality category of food service and lodging, which had a monstrous rate of 5.29 times higher than the average, software tech is the best industry for MBA negotiations. Healthcare/pharmaceuticals and real estate are the two next likely industries to negotiate an offer, at 2.07 times and 2 times above the going rate, respectively.


“It’s pretty clear that if you are going into banking or consulting, you’re not going to be able to negotiate unless the firm only hired a couple MBAs per year,” says TransparentMBA co-founder and CEO Mitch Kirby, a recent Booth grad. “But for most other careers, you should absolutely try. And the returns of negotiating are outstanding.”

At least, they can be, as illustrated by the data. After removing a dozen outlier responses, a consultant reported the largest negotiation — $80,000 higher than the original base salary offer. An MBA going into product management was able to gain $70,000 more than first offered. On average, no job function is more generous with their MBA negotiations than venture capital, with an amount of $17,875. However, as TransparentMBA co-founder and COO Kevin Marvinac points out, the venture capital sample size is still relatively low. Not surprisingly, product management, business development, and private equity job functions had the next highest average increases, of $14,988, $13,375, and $12,200, respectively.

And that dataset is what Marvinac believes is most “astounding,” especially since negotiations can be taboo for some MBA students. “It’s amazing to think that you could increase your compensation by nearly 10% your first year out of school,” Marvinac says in an email exchange with Poets&Quants. “(That’s) essentially two years’ worth of performance raises just from having a conversation.”


For Costa, working up the guts to have the initial conversation was the first hurdle. “I felt negotiation was not my strong suit, which is ironic because I’m aggressive in business,” she says. “But in negotiating, you almost feel like you should just be thankful you have the job.”

Negotiations experts at elite B-schools agree that having the hard data and doing preparatory research is key.

“When we talk about offer negotiation, I encourage MBAs to step back and not think about about the name of the company they got the offer from,” explains Annie Marra, the assistant director of the Career Management Center at Cornell’s Johnson Graduate School of Management. “And not think about the size of the compensation package that is on the table for them to receive, but to really strongly consider the work, the position, and the location. Is this going to be a place where they are going to thrive professionally and personally. That’s always where we start.”

Mark Friedfeld, the MBA career coach at UC-Berkeley’s Haas School of Business, instructs his MBAs to do thorough research on how their role fits into the greater company before considering the negotiation conversation. “It’s all about preparation,” Friedfeld says. “Often times, people think it’s nuanced and getting into the minds of the other person, but if you do your homework and show where you are getting your data to the other side, it’s appreciated and well-received.”