What MBAs Make In Their First Year Of Work


At Booth, the $145K starting salary in consulting in 2016 was higher than any other industry, including private equity, venture capital and investment management. The $170,000 salary-and-bonus packages, moreover, do not include tuition reimbursement, even though several consulting firms now pay summer interns who accept a job offer their second year of tuition as an inducement to join their firms. At Booth, a year of tuition costs $66,540. For MBA students at leading schools lucky enough to land an internship and an offer, the first year compensation deal is now nearly a quarter of a million dollars at $236,540, though the $66,540 would not be reported in the official stats from the school.

In fact, that leads to another issue. These numbers tend to be conserative because they did not include such benefits as tuition reimbursement, paid relocation expenses, auto allowances, profit sharing plans, stock options or restricted stock awards, and a few other perks. Yet, some of these benefits add up quickly. At some schools, such as Stanford and UC-Berkeley’s Haas School of Business, as many as a third or more of the graduates are awarded equity that is unaccounted for in these numbers. Totals also are impacted, of course, by student career choices, from the companies and industries they decide to work for to the location of the job. Schools that have a sizable portion of their grads returning to Latin America, the Middle East and India, where employers pay much less, also will see downward pressure on their overall salary stats as they convert those comp numbers into U.S. currency.

How schools report salary and employment stats is all over the map. Most of the data here was collected from the schools by Poets&Quants outside of the reporting in their 2016 employment reports. Some schools report both median and mean numbers for salary. Others only provide one  set. Some schools don’t even bother to report overall numbers but rather figures for each industry or function. Some schools report sign-on bonuses without the percentages of students who received them. Other schools fail to note “other guaranteed compensation” or the percentage of students who reported that extra level of pay.


And still other schools might include things in “other guaranteed comp” that aren’t technically allowed by the standards of the MBA Career Services & Employer Alliance, which sets guidelines on how business schools should report on pay and employment. The CSEA standards state that other guaranteed compensation may include a guaranteed annual bonus and guaranteed “overtime” compensation. Stock options, relocation, tuition reimbursement, and moving expenses are not allowed. This year only two major schools declined to provide numbers for other guaranteed compensation: Tuck and Kellogg.

“I suspect you’ll see a lot of variance around the ‘other guaranteed compensation,’ explains Eric D. Johnson, director of graduate career services at Indiana University’s Kelley School of Business. “It’s my understanding that schools vary in their interpretation of what this is asking for. We adhere to a pretty by-the-book definition, and hence our number is low. We don’t count relocation or target annual bonuses, for instance.”

For the first time ever last year, Stanford reported a new compensation stat called “expected bonus” which included both guaranteed and non-guaranteed compensation. The school found that 61% of its graduates reported an average expected bonus of $66,341, much larger than the $38,750 average, because the range of the expected bonus was $5,000 to $500,000. Wishful thinking on the high end? Maybe. But few MBAs are either shy or lacking in confidence.

(See following page for our analysis of total median pay at leading schools in 2016)

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