IMD, LBS Top Forbes’ Global MBA Ranking

The IMD campus in Lausanne, Switzerland

Wharton’s No. 1 victory in the new 2017 ranking of the best U.S. MBA programs by Forbes wasn’t the only surprise on the new list. The other big upset occurred on the magazine’s ranking of one-year MBA programs. IMD, the school that has a single intake of 90 students a year, was named best over INSEAD.

IMD, based in Lausanne, Switzerland, pushed aside INSEAD, which won two years ago, to gain the one-year crown on Forbes return-on-investment calculations. More surprising, perhaps, was that on an ROI basis, it wasn’t even close. IMD’s five-year gain on an MBA, the sole basis of the Forbes ranking, was $194,700. That’s $44,300 more than INSEAD’s five-year gain of $150,400.

Even more surprising was that the five-year gains of many peer programs after INSEAD was so close as to be statistically meaningless. No. 3 IE Business School in Spain had a gain of $145,400, less than $5,000 under INSEAD. No. 4 Cambridge Judge Business School was at $140,000, little more than $5,000 under IE. No. 5 SDA Bocconi in Italy posted a five-year gain on the degree of $138,100, less than $2,000 under Cambridge.

IMD’s program also had the shortest payback period of any ranked MBA program in the world by Forbes: A quick 2.3 years, with MBAs in the Class of 2012 earning median compensation of $215,000 five years after graduation. That level of pay, Forbes estimates, is more than any other non-U.S. school and just $10,000 below the pay of Wharton MBAs whose payback on the MBA is 3.8 years. The five-year gain for Wharton MBAs, by the way, was nearly $100,000 lower: $97,100 vs. $194,700. That is the more immediate dollar-and-cents advantage of a one-year MBA program.

Of course, students who take a 10-or-12 month MBA program only lose one year of compensation which quickens their immediate returns. And Forbes’ methodology, which fails to account for the internship pay a two-year MBA would receive, tends to overstate both the five-year gain and payback periods of one-year options. Wharton MBAs who interned at consulting firms over the summer, for example, earned $26,000 for their work.


Entrance to the London Business School

London Business School, meantime, topped Forbes’ ranking of two-year-long, non-U.S. programs for the fifth time in a row. LBS’ two-year program, moreover, boasted a five-year gain on the degree of $119,100, highest of any two-year program in the world, with a payback period of 3.4 years on the investment.

The value of the MBA from a non-U.S. school, at least as measured by Forbes, is without question. Graduates from the best international two-year business schools  ranked by the magazine had an average five-year gain of $74,300, nearly 50% higher than MBAs of two-year business schools in the U.S. who saw average gains of just $50,000. That comparison, however, includes a larger group of schools in the U.S. against a much smaller sample of international schools.

Unlike other rankings, which take into account the quality of the incoming students, the prestige of the faculty, the satisfaction of graduates with the MBA experience as well as the networking power of alumni, and the more immediate employment and salary outcomes for graduates, Forbes zeroes in on one simple measure: ROI.


To compile that metric, the magazine comparies the earnings for the MBA Class of 2012 in their first five years out of business school to their opportunity cost (two years of forgone compensation, tuition and required fees). It includes total compensation, including salary, bonuses and exercised stock options. Forbes also adjusts the actual salary data for cost-of-living and assumes that compensation would have risen half as fast as their post-MBA salary increases had these alumni not attended business school. Schools are solely ranked on the five-year MBA gain, the net cumulative amount a graduate would have earned after five years. Forbes converts pre-MBA and 2016 salaries using three-year average exchange rats, while applying a five-year average to its estimates of five-year MBA gains.

In the one-year MBA category, IE Business School in Madrid moved up two spots to rank third behind IMD and INSEAD. That rank is based on a gain of $145,400. Rounding out the top five one-year MBA programs is Britain’s Judge Business School at University of Cambridge ($140,000) and Italy’s SDA Bocconi School of Management ($138,100).

Among the two-year international MBA programs, IESE captured the No. 2 spot again, also for the fifth year in a row, with a five-year gain of $97,100, up 15.5% compared to 2015. CEIBS in Shanghai ranked third on the list with a five-year gain $95,000, an increase of 32% versus 2015. HEC Paris was fourth, with a five-year gain of $85,300, while ESADE in Barcelona, Spain, had the biggest improvement of any two-year program overseas, gaining five spots to place fifth, with a $58,700 gain.


Forbes placed numerical ranks on nine two-year interational programs and 17 one-year options, the predominant format of the MBA in Europe. Given the larger sample of one-year programs, there was much more movement in those rankings. For one thing, a have dozen new schools made it onto the ranking: Hult International, Imperial College London, City University Cass, Rotterdam, the University of Hong Kong, and Mannheim in Germany.

SP Jain and HEC Montreal both fell six places this year to ranks of 16th and 17th, respectively. Warwick Business School dropped five positions to rank 14th after placing eighth two years ago in the biennial survey. Cranfield Business School also sank four spots to finish 10th.

(See following page for rankings tables with comparison data)


  • Angelo

    You might want to check the number of top firms which ONLY hire from IMD, INSEAD and LBS, and then, maybe, you can have a better idea of which are the top tier MBA programs in Europe.
    Btw, IMD class has only 90 people and, sincerely, I’d rather prefer to be a Porsche than a Suzuki (just think about something like 90 vs over 1,000…)

  • Koichi Fuyumi

    Referring to the # of applicants and yield, I would like to add something below:

    Yield is something adcom has very limited influence to control. It is nearly 100% relying on candidates to weight all offers and pick the one best fit for their needs. IMD’s yield at 85% (i don’t know where you get this number anyway) is very high. Which means only 1.5 candidate out of 10 will select other offers over IMD’s offer. It demonstrates it is a very attractive program to candidates.

    For the acceptance rate, it is something which I believe IMD’s adcom and marketing team have room to improve. If you follow Poets & Quants for a while, you found that the current trend is majority of MBA program simplifying their application process and one of the most noticeable effort is to reduce number of essay in the applicant form. However, IMD is doing something totally different. They didn’t reduce their number of essay. Moreover, they request their applicants to fly all the way to Switzerland to conduct a full-day assessment. It scares away candidates who is looking for backup schools and reduced the number of applicants. Also someone mentioned that they have a “access your chance” function which allows candidate to test their chance before sending in official application, it further reduced their # of applicants.

    It seems like the KPI for adcom in IMD is not # of applicant. My hypo is their KPI could be related to finding fit candidates instead of finding large number of applicants. They are actually finding all the way to reduce the number of irrelevant applications.

    But to be fair, although IMD’s # of applicant is not comparable to other schools due to their uniqueness in the recruitment process. The drop in # of applicant is not a healthy trend. In simple word IMD 2017 is less attractive than IMD in 2012

  • Koichi Fuyumi

    I think career development is something more than salary. Diversity of industry and location is also important

    IMD performs the best in Europe in terms of salary data; It has the highest graduate salary (referring to schools’ placement reports) and according to Forbes their alumni continue to perform strongly in job market 5 years after graduation. It put IMD in tier 1 with no question

    However, unlike LBS and INSEAD, IMD is not a door opener for ibank or any job in the States. (Referring to IMD’s placement report) So even LBS & INSEAD alumni make lesser than IMD alumni, I still consider LBS & INSEAD are the top 2 in the tier 1 and IMD is #3 in the 1st tier

  • Benwallace

    You have a valid point. I also still wonder why LBS and INSEAD grads cannot keep up with the compensation of IMD grads? Is it all because of the location but IMD has 90 people from 45 countries so maybe 70% stay in Europe and maybe 10-20 maybe stay in Swiss. Thats cannot be the whole story. And if LBS and INSEAD has so many superior students than why are they not able to outperform IMD graduates 5 years after graduation? They are great schools as well and I font want to knock them but I think it is disillusional to say that they are in a different league. Where is the proof…. I need numbers AFTER graduation. Otherwise you could argue IMD takes in candidates which are not as strong but turns than into much better graduates which is reflected in salaries after graduation and 5 years after.
    Why insead is not able to get higher salaries? They send 40% into consulting and usually the salary increase rate is much higher in consulting compared to industry (where IMD is strong). Shouldnt INSEAD grads be able to overtake the IMD grads after 5 years?Can someone explain that?

  • Koichi Fuyumi

    Can you briefly explain your arguments and supporting facts?

  • Koichi Fuyumi

    If you consider employment figure the most important dimension to measure a MBA program, IMD’s average salary for 2016 class is $120,140 and St. Gallen 2016 class records $108,560. I cannot understand why you believe St. Gallen is the best in Switzerland

    It is even more questionable why you trying to tier IE with LBS in the 1st tier. IE graduates make $88,807 average salary only while LBS graduates make $102,582

    Tier 1
    IMD 120,140
    INSEAD 103,700
    LBS 102,582

    IMD always perform better in career placement but consider the reputation is relatively unknown in U.S. due to small class size and focus on Europe, people still consider it is not better than LBS & INSEAD and tier them into a cluster

    Tier 2
    HEC 101,014
    IESE 93,154
    SDA 91,355

    Top school in leading European countries including France, Spain and Italy. Germany is not a fan of MBA education traditionally

    Tier 3 or below
    Oxford 91,530
    IE 88,800
    Cambridge 84,474

    Reputable school with a lot of potential but not yet considered as top school in Europe

  • MBA-Watch

    I am really sorry that you felt it this way. And I am really sorry that this is your last reply. All what I wanted is to engage in constructive discussion with sharp criticism and full freedom to express our thoughts. Please, accept my apology.

  • Benwallace

    The dean rotates usually after 3 years at IMD. That is the normal procedure I read. 115 k is much higher salary compared to Insead or London Business School if I am correct. It is also misleading to only observe the dollar trend since the dollar was really strong in the last 2-3 years which led to a dollar decrease in salary but the euro salary was quite constant. I dont want say IMD is the best school in the world but I think it is not as bad as people here suggest. For many who focus on leadership and general management in the industry it might be the best fit. There are many rankings out there every applicant can pick his favorite. I still like money though 😂

  • MBAObserver

    This will be my last reply to you as you don’t seem to follow reason and you certainly do not understand the term constructive criticism. Again, this is one of many rankings where the IMD MBA is considered a top school. I am a supporter of many European schools, not just IMD, and I look at things from an objective standpoint. I find the only overly emotional and sensitive dialogue shown is from you and, as many others have pointed out, it disqualifies you from this conversation. The European MBA has a bright future and IMD, LBS, INSEAD, IESE, and others will continue to do drive it further.

    I can only conceive the motivation behind MBA Watch to be, you hate them because you aren’t them. Congratulations to all schools which made the list.

  • MBA-Watch

    constructive criticism is an essential to clarify the school’s real position and discover tricks and misleading information that can be drawn from flawed ranking. This is very important for prospective applicants and for the school leadership to correct wrong things. Unlike other solid top schools, It is really interesting that IMD is so sensitive against criticism as they are not confident of their position. Credits go to P&Q for allowing us to express our opinion and views.

  • MBAObserver

    This article is literally about how the IMD MBA is not only a top school but the top 1 year program outside the USA. You do not have to agree with me or the ranking but, as many others pointed out, your negative commentary is not needed

  • KARL

    I’m sorry but the number of applicants is strong sign of the program popularity, brand name, prestige, and quality. It is hard to justify that there is no connection between the program quality and its share of applicants.

  • KARL

    This is another terrible news for IMD, the dean is just 2 years in the office. It means the school is really struggling and slowly dying. As for the salaries, the latest published report of IMD MBA employment, says the opposite, that the median salary is $115K, how can you consider this as salary for top school?!

  • Benwallace

    The IMD Dean is going to be changed from Janurary 2018.
    I think the numbers are strong again for IMD and the people graduating from the program tend to get good jobs with quite decent pay….at least higher than the LBS and INSEAD pay, given that IMD people are not so frequently searching jobs in the high-paying Finance sector this is quite remarkable. Is IMD better than LBS or Insead or any other program? I dont know and its not relevant. There are other rankings which have a question which goes something like:” Did your program fulfill your expectations”?. The No 1 place often went to IMD. Their average and median pay is higher than that for the other programs. So there are many metrics that seem to indicate that the IMD MBA does a great job in satisfying their participants. Maybe IMD does a bad job in terms of marketing and it is definetly easier to spread words with 1000 participants than with 90. But there is no clear connection for me between the number of applicants and the quality of the program. If it were bad than why the salary is much higher than compared to INSEAD or LBS and if the candidates quality is much better at LBS and INSEAD than why they do not have higher salaries after 5 years? Oftentimes now the age argument comes but INSEAD has an average age of 29 and IMD of 31… after 5 years it is 34 to 36….I dont believe that after 5 years the reason for higher pay is still only the 2 years age gap. Maybe location is the reason, but still both schools graduates tend to get jobs in Europe and INSEAD even has like 40% of the class in consulting (many company sponsored btw because you need to have a huge class to be attractive for company sponsoring). But still the salary is not higher after 5 years eventhough consulting is one of the highest paying industries……One possibility: maybe the applicants went through 1 year of partying and learning only a little bit and than are not ready to perform as people who really learn something in their MBA and are pushed a bit harder? I mean there must be the reason for the numbers?

  • Jules Silva

    I do not know who is behind this comment. but if your intention is to describe a person as German, or old to be fifty or so, the only thing you have achieved is to disqualify yourself. I hope that the person who controls these comments acts in accordance with the common sense. For the people who have the honor to know him we know the great person he is.

  • Jules Silva

    Just a comment

  • MBA-Watch

    Another point: if you look at the IMD MBA pages on the GMATCLUB website, the threads of “calling all applicants…” you will see very clear slow death of the interest in IMD over the recent years, it is hard to believe that we are almost in October and just handful applicants exchange ideas and sharing interview experiences there!!..on the opposite of other top schools,.

  • MBA-Watch

    The program is irrelevant. Career problems for grads, Gloomy place, The so called DEAN is rude, arrogant “german” economist, old, and off reality.

  • MBA-Watch

    By the way, there is a series of articles here in P&Q about the insane new director of IMD MBA who damaged the program and I believe he is one of the main reasons behind the program damage. He was director and gave himself a ttle of DEAN last year!! Many good professors and excellent staff left the school because of his arrogance.

  • MBA-Watch

    The decline is because the school MBA program gradually became IRRELEVANT and the rise of many other good schools in better places than gloomy lausanne. St Gallen was not even mentioned when talking about MBAs back in 2005 and 2006, at that time IMD was considered top, But it 12 years!! The same team of IMD, the same location, even the same tuition fees!! the obvious thing changed is decline in number of applications, lose grounds in degree programs..and eventually almost nobody consider IMD as top school.

  • MBAObserver

    I do not know the answer and neither do you. It is besides the point and I refuse to judge the quality of a school solely by the number of applications it gets, especially when I do not know the full story.

  • C. Taylor

    Hi Warren aka ‘MBA-Watch’,

    I can see what you mean. 215k USD is not the 240k pulled by earlier grads. Let’s look who else pulls similar numbers: HBS at 212k and Stanford at 215k. So risky. Let’s hope the economy picks up soon.

    “why do you think the consistent decline”

  • ProspectiveEUMBA

    For the most part, I agree with you, especially in terms of how Cambridge uses PPP. I personally think PPP salary is one of the worst ways to compare career results, especially for students who likely are carrying the debt loads in EUR/GBP/USD. I completely ignore that metric in all of their reporting.

  • MBA-Watch

    Cambridge used the same way IE used to climb the rankings by adjusting their employment figures based on PPP, because they targeted the FT ranking. Oxford in my opinion is terrible and failure example. The only thing that holds Oxford MBA up is the quality of junior students that are attracted by the stellar brand name of Oxford. But in reality, people with knowledge of the MBA, know the big difference between Oxbridge undergraduate and their new MBAs. You can’t find them as a core recruiting campus at the top consulting firms or banks. IMD used to be good, but as I said above, it lost its place due to its aging and its irrelevance. I believe that there is no school outside US is on par with the so called M7 schools, after them , you can put INSEAD and LBS.

  • ProspectiveEUMBA

    As a prospective student, I’d say IMD has slipped in my opinion. It’s a specific type of student that applies there, but that # has declined dramatically, which is concerning. I don’t think IMD is a 1 to 1 competitor to some of these other programs. The candidates are different (seniority), the MBA experience expectation is different (high workload vs year off), and the outcomes are very different (industry seniority levels). In my planning, I have a couple of programs I’ll probably apply to next year, which I favor over IMD. If that doesn’t pan out, I view IMD as an option if I decide to pursue an MBA, but don’t want to go down the EMBA route. It’s tough to simply talk about where IMD ranks as compared to some of these other programs when, in my opinion, it is not an exact substitute.

    IE is concerning if you look at the raw numbers of students who actually responded to their career survey, then of those, how many didn’t have an offer on graduation. I always combine that # with the students who didn’t respond as I assume those are unemployed as well. They’ve done great branding their program, but I just don’t see IE in the same league as the others (INSEAD, LBS / IESE, IMD / Oxbridge). As a prospective applicant, I see IE roughly in the same league as RSM, SDA, and a couple of notches above ESADE. And to be clear the only reason I include Oxbridge is because of the mother universities, otherwise they’d be in the RSM, SDA tier.

  • Gregg

    Regardless of what those useless ranking tell, it is quite clear that the top european school are London, INSEAD, and Cambridge.

  • MBA-Watch

    Forget about all things please: Clear question: why do you think the consistent decline over the last 5 years, in the number of applications for IMD full time MBA?

  • MBAObserver

    You are clearly off the mark. Given your tact, or lack thereof, I assume you have your personal bias which drives your agenda. We are not talking about one ranking, we are talking about all rankings. While they are both very good schools, IMD is objectively considered a better MBA program, period. If you get 90 students who drive the best ROI, it doesn‘t really matter how many applicants you get, rather, the quality of the applicants.

    This is an article appreciating the great work that IMD and other European schools are doing, why do you feel the need to put an esteemed program like IMD down?

  • MBA-Watch

    look at St Gallen employment report, see the employers names, salaries, to realize that it is a serous competitor .

  • MBA-Watch

    And most likely there is a good number of applicants apply without going through “assess your chances”, .. And irrespective of what you think or what I think: one thing is clear: consistent decline in number of applicants, you can check it in Forbes : from 700 to 440 to 269 now. How can you explain this? As for Switzerland, almost all big and important businesses there consider St Gallen far better and much more prestigious than IMD, you need to understand that the real power economy in Switzerland is german, and St Gallen is the harvard of german speaking world. Yes, it came to MBA late, in 2005, but it got a lot of support and superb connections, and its big boost was in the last 5 years supplemented by the sharp decline of IMD. Just check the employment report to notice the differences. Look at the curriculum and the quality of professors there. Most Professors at IMD are retired and use IMD professorship as kind of vacation. The MBA there used to have 20 professors, now it is only 14 and most are old, and irrelevant. In my opinion, for a degree program, IMD is not worth it and the school leadership itself knows this, so they focus their efforts on the school “competitive advantage” , the executive education, It generates 96% of the school revenue. This is what many advise to do: for a full time MBA program, go to top US school (M7 in particular). for short executive education, go to IMD ..

  • MBAObserver

    Both schools are great but this is not accurate in any ranking. IMD is considered the best school in Switzerland no matter where you look, including this Forbes ranking which just put IMD at number 1. I don‘t even see St. Gallen on the list.

    I see one person asking the question that should be asked, why is the number of applicants rather low? You cannot judge the number at face value because each school has its own process and own way of accounting for applications. I cannot be sure of the answer but I would assume the primary driver is IMD‘s use of Assess your Chances as a filter for applicants

  • MBAObserver

    The reason is that their is a pre-screening that happens. IMD has something that is called Assess your Chances and it is used to give people an understanding of whether or not they have a realistic chance of getting in. This does not get counted in their number of apps

  • Koichi Fuyumi

    I think there is two questions: 1. Do IMD remains its seat in European tier 1 school. Do IE a serious challenger to the 1st tier?

    1. I agree that IMD is losing it’s position in tier 1. If I got an offer from LBS & INSEAD, 99% I will reject IMD’s offer.

    2. IE is not bad but definitely not yet in a the same league. I will pick IESE for sure if I get offer from both IE & IESE. People question IE gaming the ranking by allowing students to skip GMAT (alternatively doing their own admission test). Also IE’s post-grad salary and % getting offer 3 months after graduate are questioned many times with it high self-employment rate (but still underperforming top European schools)

    BTW, making statement like St. Gallen outperforms IMD is too far away from reality which hurts your credibility


    John, can you please comment on the IMD number of applications, it is 269. I find it hard to explain such low number for a program ranked #1!

  • Kimchi

    You seem to be living in 2005! No serious recruiter or competitive applicant compare IMD with INSEAD or LBS. It is gone and history. we are approaching 2018, you should wake up! Cambridge is now the third runner, followed by IE and IESE.

  • MBA-Watch

    IESE is a top school, no doubt. In fact, it is somehow one of very few schools that irrespective of rankings, most people agree it is on par with London, INSEAD, and IE. as for the IE, it is not me who says it is a top school, all the ranking say that. By almost every measure you would find IE miles ahead of many good european schools. In Switzerland, IMD used to be really good school, but as the post above tells, it lost that distinction for a variety of reasons, I believe now the best business school in Switzerland is St Gallen. How can you categorize an MBA program to be top if it attracts only 269 applicants?! most of them are INSEAD, London, MIT Sloan Fellows, Stanford MSx, and Kellogg 1Y rejects! If you can’t see the sharp and consistent deterioration of IMD MBA, you have a serous problem. By the way, we live in the similar universe, otherwise we won’t be able to participate in the same website!

  • Koichi Fuyumi

    I guess you and me live in two parallel universes. IE is even not Spain’s top school. You won’t make IE a better school by tiering it with LBS in a discuss board and making not supported claims that saying it is far better than a tier 1 school in Europe. You will only make IE a more reputable school by work hard and work smart, prove your school with achievements. Talk won’t make your school stronger, work does.

    If there is one school has the potential to challenge LBS / INSEAD / IMD top 3 status in Europe, that school will be IESE, not IE for sure.

  • jim

    do you mean the school dean ?

  • XXC21

    with 269 applicants, I bet MBA director knows every applicant personally.. and by the way he calls himself an MBA Dean! yes, Dean !!

  • Remin

    It is hard to mention IMD with its miserable 260 applicants with Stanford!

  • MBA-Watch

    in a typical year IMD yield is about 85%, that means it accepts around 106 students. with 269 applicants, its real acceptance rate is 40%. The application number for IMD is in consistent decline over the last 5 years, from around 700 in 2011 to just 250 or so last year. Many reasons for that, the obvious one is the overall decline of the school quality and its focus on the more profitable short executive education courses, also, there was an emerge of better and more relevant schools around the world. IMD is no longer seen as comparable to London or IE, many employers, students, future applicants see IMD as another SDA, Erasmus RSM, ESADE, or Cranfield.. A lot of its recent graduates faced many problems finding jobs and the majority pick jobs and roles similar to their pre-MBA..

  • Thanks for that clarity. We just corrected the error.

  • Ram Lakshman

    University of Hong Kong was not ranked last time around. You’ve confused it with Hong Kong University of Science and Technology (HKUST). That was No.5 last year in the 2-year rankings. This year it is NOT RANKED.

  • C. Taylor

    “Forbes does not include paid internships”

    OK. If this is a given and Stanford 2012 grads averaged 2.5 month internships, then Forbes would have to adjust costs down (or the 5-year gain up) by ~13.6k before tax and additional costs associated with the internships (additional housing in a different location, etc.).

    At graduation that would bring Stanford’s 5-year gain to 106k. This is in line with the University of Hong Kong, which places 7th on Forbes’ international one-year list (as opposed to Forbes’ listed 5-year gain of 92.5k for Stanford–in line with Mannheim, which places 8th).

    While the mean monthly salary came to $7,009, for the class of 2012 (listed in the 2010-11 report), only those seeking jobs obtained an internship in Stanford’s stats (286/384; listed in the 2011-12 report). That brings the average monthly* salary to 5,220. Forbes uses a 4.1% discount rate so, roughly; 5,220*2.5*(1.041), or 13.6k at September 2012.

    Assuming internships are not accounted for, including them is meaningful for the 5-year gain but quickly zero out against total earnings. Short-term housing is not cheap, so the benefit may be less than first meets the eye.

    *We don’t know what the median monthly salary would be if we include the entire class (about 50 people down from the listed median, [or about the 33rd percentile, instead of the 50th]), so the mean may be a decent proxy. The listed median (not appropriate) would be 16.9k or a difference of about 3.3k from the true mean.

  • Forbes does not include paid internships in their calculations. Those summer gigs would tend to lower the actual cost, and therefore increase the gain, of a two-year MBA program over a one-year program. At Stanford, 100% of all job-seeking graduates had a summer internship that paid average monthly income of $7,150, though the high level was $16,667 a month.

  • C. Taylor

    Sure! It depends on how Forbes calculates ‘foregone earnings’. Internship earnings would technically not be foregone and should therefore be included in the cost of the MBA. Also remember that IMD includes the cost of trips other MBA programs call optional (and therefore cost extra).

    This gets into a grey area because some programs do not allow paid internships in some experience programs. At Stanford, for example. Also, non-standard internships are not always paid at high rates but do result in post-MBA jobs. I would guess Forbes includes earnings from internships in the cost calculation, but these might provide arguable reasons not to. I did not see any specific mention in the current methodology and don’t recall this from any earlier articles. Do you know of one, perhaps?

    For stock options, they are worthless if you can’t sell them or exercise them. Also if they are not ‘in the money’. Usually options vest (become available for action) years after awarded. So Forbes’ methodology should capture any ‘in the money’ options that have vested by the end of the fifth year (ex. September 2017 for Stanford’s class of 2012).

    I would hope most people are getting stock/options at the fifth year mark, so it is very reasonable to pick a specific date to cut off further unvested stock/options (otherwise you can only consider entire-career earnings). Five years after graduation, for example.

    I guess a couple takeaways here from my above post are:

    1. Dates matter. Forbes suggests it counts five individual ‘year’ periods of earnings, post-MBA. Total comp for the last year must be estimated, at least in part, for at least some programs. I suggest a start date of three months post-MBA is appropriate.
    2. Forbes is probably basing any projected earnings on total real-world earnings for the period between graduation and Forbes’ survey submission deadline.

  • There’s also the question of internship pay. A one-year program doesn’t provide students with that kind of compensation, but a Wharton Class of 2012 student who interned in consulting earned $26,000 for that summer’s work. Forbes makes no adjustment for such internships nor does it add the value of unexercised stock options which the magazine says that a third of Stanford graduates had stock options with a median value of $380,000.

  • reckmondatary

    Ralf style ..

  • C. Taylor

    Hey guys,

    Love your work, as always. Need to keep time frames in mind here. The ‘fifth year’ compensation data is indeed ‘2016’ data. But remember this is for the class of ‘2012’. So pre-MBA compensation would be for ‘2011’ for one-year programs and ‘2010’ for two-year programs. An example for how this plays out for growth in salaries post-MBA is as follows:

    At the three-month post-graduation date of September 2012, Stanford’s class of 2012 graduates, made a median+bonus of 149k* (215k** total comp for 2016). At the three-month post-graduation date of September 2013 IMD’s class of 2012 made a median+bonus of 152k* (215k** total comp for 2016).

    It now depends on how you count start/end dates for the programs. If, instead of ‘2016’ total comp, we take total comp in the fourth year*** after graduation, then data for Stanford would be September, 2012 through September, 2016. For IMD, this would be March 2013 through March 2017.

    This would suggest 2012 IMD grads’ salaries grew at ~12.3% annually (post-MBA) and 2012 Stanford grads’ salaries grew at ~13.0% (post-MBA).**** However, total comp is almost always more than median+bonus. For Stanford’s 2012 grads, median+bonus+median other guaranteed comp was 174k* suggesting only ~7.3% growth (would be similarly lower for IMD).

    * Unadjusted for cost of living.
    ** Adjusted by Forbes for cost of living differences.
    *** The end of the fifth year + three months post-MBA would be September 2017 for Stanford and March 2018 for IMD. Strictly speaking, Forbes’ ranking is probably marking the salary at day one of each 365 day period, rather than day 365 (day 365 is used in the above example). Day one of the fifth year post-MBA (+ three months) is in September 2016 for Stanford and March 2017 for IMD. This would mean Forbes is projecting data forwards for the final months of the fifth year for at least some programs.
    **** From the respective one-year marks of March 2014 for IMD and September 2013 for Stanford.