Stanford MBA Pay This Year In One Word: WOW!

stanford gsb commencement 2017

Students ready to receive their diplomas at the Stanford Graduate School of Business 2017 Commencement. Photo by Nathan Allen

The students who graduated from Stanford University’s Graduate School of Business this year can rightly boast of being among the most highly compensation MBAs in history. The average total compensation for a Class of 2017 graduate at Stanford was an unprecedented $180,284, up slightly from $179,346 a year ago. But that total barely tells the story this year.

Median base salaries rose to $140,000 from $136,00, the third consecutive year in which base pay increased. Median sign-on bonuses, received by 51% of the class, remained stable at $25,000. But median other guaranteed compensation, reported by 25% of the graduates, jumped to $50,000 from $40,750. And for the first time, Stanford reported a new category of compensation called median “expected performance bonus,” reported by 65%, of $35,000. The latter category includes bonuses that are commonly mentioned in offer letters but not explicitly guaranteed.

While the median numbers were impressive enough, the truly “wow” occurred in the reported averages. Average base salary rose to $144,455, from $140,553 a year earlier, while signing bonuses also advanced to $29,534, versus $23,636 last year. Average other guaranteed comp increased to $83,065, from $74,665. Average expected performance bonus, not reported last year, came to a whopping $71,946. Add it all together and the average first-year compensation for a Stanford MBA this year is a rather remarkable $227,768, a pretty big bump on the $180,282, without the anticipated performance awards.


That is the highest first-year total for any MBAs ever! Of course, it does include bonuses that might disappear in a recession, but with no downturn in sight, that is an unlikely prospect. And yet even that very hefty sum does not include tuition reimbursement, auto allowances, profit sharing, 401K match plans, the reimbursement of relocation expenses, or, for that matter, stock options and restricted stock grants, even though 32% of Stanford’s graduating class reported getting stock compensation in their offer letters.

In contrast to several peer schools, Stanford is the only school to report expected bonuses. But the school still comes out on top compared to Harvard Business School which reported median total pay of $174,600 for its MBA grads this year, nearly $6,000 less than Stanford’s $180,284 without the extra expected bonus bump (see following page for our table of pay at the top schools so far). The highest paid members of Stanford’s Class of 2017 grabbed truly sensational pay packages. The highest base salary–$285,000–went to a student landing a job with a venture capital firm. The highest sign-on bonus–$77,000–was given to a grad who went to work for a hedge fund. The top other guaranteed compensation–a whopping $450,000–also went to a hedge fund-bound MBA. And the highest expected performance bonus–also $450,000–was reported by a student employed by a hedge fund.

Maeve Richard, assistant dean and director of Stanford’s Career Management Center, says she decided to include the new category of bonus because she is less than satisfied with other guaranteed compensation, which will no longer be reported by most schools next year. “I felt there were issues with other guaranteed compensation. It was an opportunity to misunderstand the data and end up under reporting what the bonus opportunities were for our students. So we gathered data around expected bonus which often appears in offer letters. That is the one place where we are stepping out from what we typically report.”


Maeve Richard, director of the Career Management Center at Stanford GSB

Overall, she seemed nearly giddy with delight over the school’s 2017 employment report published today (Dec. 13). “The reason why I am pretty pumped up is that when we took a look across the report it is very balanced and even,” says Richard. “And the good news is it is all positive. Students have had a lot of choice and it just continues to improve along with compensation. Last year, 383 companies came to recruit on campus. This year it was 411 companies. And for quite a long while, our trend was about 350 to 355. The increase speaks to the strength of the market but also student desires to really go out for what they are looking for. The good news is that they are finding what they were looking for.”

As is often the case with Stanford, job offers and acceptances at graduation and three months later often trail other schools. That is typically a function of MBAs being more choosy about landing the perfect offer, but it is also due to the fact that more Stanford MBAs prefer to spend their summer internships at Silicon Valley startups and early stage firms and then seek full-time offers with more established companies. At most other schools, internships are converted into early full-time job offers that lead to better placement numbers. Richard says Stanford students show a “strong interest in summer startup opportunities. Students will experiment but the actual choice they make at graduation is often different.”

Just 73% of Stanford MBAs had job offers at graduation, up a single percentage point from a year earlier, with 92% three months after commencement. Acceptances at graduation trailed offers by 10 percentage points at 64%, also up a percentage point, while acceptances three months later hit 88%, up six percentage points from the 82% accept rate of last year. Those comparatively lower numbers, versus Wharton where 97.1% had offers three months after graduation and 92.6% accepted, tend to hurt the GSB in U.S. News‘ rankings.

“Many students have a couple of opportunities to choose from and they want to take their time to make sure they accept what they really want,” explains Richard. “We are providing more guidance as a school in terms of encouraging students to choose a little sooner. Fundamentally, the school’s position is that these are adults, and we emphasize making high quality decisions so we leave the decision for them and don’t put pressure on them.”