What MBAs Make In Their First Year Of Work

For the MBA graduates of top business schools in 2016, it was another record year of starting pay.

The vast majority of schools are reporting the highest levels of compensation ever received by their graduating MBA classes, though last year’s increase at most schools was minimal after a sharper rise in 2015.

For the M7 schools, that elite group of MBA programs thought to be at the top of the food chain, the overall increase in total median compensation—which includes base salary, sign-on bonus and other guaranteed compensation— this year was just 1.4% this year to $149,871. Among those top schools, Harvard Business School was at the high end of growth, with a total pay rise of 4.5%, while Stanford Graduate School of Business saw a 2.2% increase. The only M7 school to report a decline was MIT Sloan where total pay fell slightly to $145,826 from $147,729 a year earlier.


Once again, Stanford MBAs scored the highest median compensation packages, adjusted for the percentage of students reporting sign-on bonuses and other guarantee compensation. At Stanford, total first-year compensation came to $163,827, up from $160,287 in 2015. Harvard Business School was next with total pay of $158,080, followed by a few schools that would surprise most observers.

Class of 2016 MBAs from New York University’s Stern School ($153,635), the University of Virginia’s Darden School of Business ($150,688), and the University of Michigan’s Ross School of Business ($150,606) came in right after Stanford and Harvard and were among the only five schools where student median total compensation exceeded $150,000. Graduating MBAs at Dartmouth College’s Tuck School of Business and UPenn’s Wharton School just missed the $150K mark, bringing in $149,732 and $148,892, respectively.

This year’s more tepid increase is, no doubt, a consequence of fewer MBAs going into finance, where “other guaranteed compensation” tends to be highest. That category of compensation pushes Stanford into the top because median other guaranteed pay for Stanford grads came to $40,750 last year and was reported by 35% of the MBAs. (We use median numbers because some students are at the extreme levels of pay and can have too large an impact on averages, especially at schools with smaller classes sizes. At Stanford, for example, the highest other guaranteed compensation number for a single student last year was $400,000.)


By and large, the standard median offer at leading schools was a $125,000 base salary and a $25,000 signing bonus. Stanford and Harvard were the only two schools where MBAs reported higher median base salaries at $136,000 and $135,000, respectively. None of the top schools reported median salaries below six figures.

Ask a career director about MBA pay and employment in 2016 and you get nothing but positive responses. “It’s been a good year,” says Sheryle Dirks, associate dean for career management at Duke University’s Fuqua School of Business. “It is an incredibly positive year, and we’re incredibly proud of where our students landed,” says Liza Kirkpatrick, the new director of the career management center forfull-time MBAs at Northwestern University’s Kellogg School of Management. “Some 96% of the students received offers three months after graduation. We have a great median base salary and deep relationships with employers who value the talent pipeline.”

At 27 of the leading U.S. business schools, total median pay rose for MBAs graduating from 22 schools. The largest year-over-year percentage increases occurred at Washington University’s Olin School of Business, up 12.8% to $126,550; UCLA’s Anderson School of Management, up 9.7% to $145,770; Vanderbilt University’s Owen School of Management, up 7.3% to $132,040; the University of Washington’s Foster School, up 6.9% to 141,121, and New York University’s Stern School of Business, up 6.5% to $153,635 (see our table at increases and declines in total pay in 2016).

In fact, the MBA job market was so good that many graduates became more choosy–not for money but for the right company or industry. Several schools reported that the percentage of grads who had accepted their jobs at graduation and within three months of commencement trailed previous years. At Stanford, for example, just 82% of the grads had said ‘yes’ to a job offer within three months of graduation, even though 90% had job offers in hand. But an increasing number of students last year sought jobs with early state companies and startups that do just-in-time recruiting.


And at a number of schools, millennials turned down more lucrative offers in favor of dream jobs they preferred. When Jake Qian graduated from UC-Berkeley’s MBA program last year, he passed on a job offer from Google to take a position at baby food company Plum Organics for about half the pay (see Turning Down Google To Work Elsewhere For Half The Pay).

Another classmate, Caitlin Fitzpatrick, took a retail marketing manager at Lucy Activewear after interning at Apple. While working for the maker of the iPhone was a great experience, Fitzpatrick—who grew up swimming and skiing and now runs, rock climbs, and does yoga—was determined to work in sports retail. Even more intriguing, both students were singled out by Berkeley Haas in a news release about its 2016 employment report which showed that average salaries had declined slightly from year-earlier levels, partly due to a near tripling of students who went into lower-paying jobs in consumer packaged goods companies and retailers.


Stanford also tends to benefit from the outsized number of students (19%) headed into private equity and venture capital, two of the most lucrative industries for freshly-minted MBAs. The median starting salary in PE for the 12% of the class that landed those jobs was a whopping $177,500 last year, some $41,500 more than the overall class median base salary of $136,000. The median for Stanford MBAs going into venture capital, roughly 7% of the class, was $167,500, some $31,500 over the class.

In almost all cases, the very highest starting salaries went to students headed into the financial world. Harvard Business School’s highest reported median salaries went to graduates who accepted jobs with hedge funds and PE, VC and buyout shops. Those graduates pocketed starting median salary of $150,000. Yet, in the 75th percentile of those offers, the numbers came to medians of $177,500 in hedge funds and $165,000 in private equity and venture capital. More seductively, other guaranteed compensation at HBS for students lucky enough to get a hedge fund job came to a whopping $125,000 median, received by 23% of the students. At Wharton, this year’s highest median salary for any industry was $150,000 for graduates in PE and buyout firms and $145,000 for those who went into venture capital.

Consulting and high tech firms continue to increase their hiring of MBAs and their year-end bonus awards tend to be less common than they are at many firms in the financial sector. But the elite consulting firms, in particular, raised the ante again at leading schools last year in hiring talent. At the University of Chicago’s Booth School of Business and a host of other top schools from Wharton to Northwestern University’s Kellogg School of Management, starting salary offers to new MBA graduates reached a median of $145,000 with a $25,000 signing bonus. That’s $5,000 more than a year earlier when the median salary was $140,000 at top schools and $10,000 more than only two years ago when the standard offer was $135,000 to start.

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