How Wharton Fought Its Way To The Top Of U.S. News’ MBA Ranking

Wharton MBA students at a recent graduation


Unlike U.S. News, the Financial Times adjusts employment data for a school’s response rate before putting this metric into its ranking methodology. It does this by simply multiplying the percentage of graduates with jobs times the percentage of respondents. That system rewards schools with high response rates and penalizes institutions with comparatively lower sample sizes. But in the FT ranking, the employment rate carries only a rather inconsequential 2% weight. If the U.S. News’ ranking were updated to include that adjustment on only its employment metrics—not the reported pay which also could be impacted by response rates—Harvard would have remained in first place, with Booth second, Stanford and MIT Sloan tied for third, and Kellogg fifth. Wharton would come in sixth and Columbia Business School would drop out of the top ten into 13th place.

Maryellen Lamb, deputy vice dean of admissions, financial aid and career management at Wharton

It’s not clear why Wharton’s response rate from its own graduates is so low when other peer schools with large graduating classes–INSEAD, HBS, Booth and Kellogg–have report rates of 98% or better. Nor is it clear why Wharton’s response rates have significantly deteriorated over a number of years. An analysis of Wharton’s employment reports shows that only 2.2% of its graduates failed to respond back in 2008. Back further, in 2003, Wharton’s career had only 15 non-respondents in a graduating class of 726, with 638 seeking employment. The non-report rate was a mere 2.01% of the class, or 2.35% of those seeking jobs.Since then, however, an increasing number of MBAs have gone missing–65, or 10.2%, of the 639 seeking jobs last year.

Maryellen Reilly, deputy vice dean of admissions, financial aid and career management, defended the credibility of the school’s employment statistics. “Given our large student population, getting 85%+ to report is an extraordinary accomplishment, as it is all voluntary reporting,” she said in a statement. “Based upon the information we receive from our students and from employers we are confident that what is reflected is an accurate representation of the employment outcomes for our students.”


Another interesting development in Wharton’s placement records is the dramatic growth in the proportion of the ‘not seeking’ population from 13% in 2008 to 25% last year (see table on following page). Among non-seekers are sponsored students who return to their employers as well as those launching entrepreneurial ventures. But a number of MBAs today now have start-up ideas which they pursue to varying degrees while also going through a job search, at least as a hedge. The industry standards on how to account for these students is vague, allowing for a another possible loophole.

If the average salary and bonus for the Class of 2016 was not biased by the response rate, it was clearly inflated by U.S. News’ insistence on using “averages” rather than “medians” for pay figures in its ranking. Average class salaries, especially those based on smaller numbers, are more likely to be skewed as a result of a few outliers. That’s especially true for any school that sends a high percentage of students into finance which can pay extraordinary large sums in private equity, hedge funds and other investment banking or management jobs.

A median number—which provides a more accurate view of typical pay—would reflect a different reality. Looking at pay data by total median compensation–including median salary, median sign-on bonus and median other guaranteed compensation adjusted for the percentage of graduates receiving bonuses–shows that graduating MBAs at six other U.S. schools had higher comp numbers than Wharton last year. No. 1 Stanford was at $163,823, nearly $15,000 more than Wharton’s median of $148,892. MBA grads at Harvard, NYU Stern, UVA Darden, Michigan Ross, and Dartmouth Tuck all made more last year than Wharton MBAs who pretty much pulled down what grads at Yale’s School of Management made. Yet, “average salary and bonus”–not total median compensation–represents 14% of U.S. News‘ methodology.