With every publication of just about every business school rankings, there is one certainty: Surprise. Every new list, including this week’s U.S. News & World Report ranking of the best full-time MBA programs in the U.S., is loaded with surprising, if not shocking, results. Some are outrageous. Others are amusing. Still, more can be completely bewildering.
Some of the eye-openers may not even involve a school’s actual ranking this year but rather the plethora of stats, from GMAT averages to starting salary-and-bonus totals, provided by the schools to U.S. News to allow the magazine to crank out the list. While it’s easy to overlook the vast array of statistics that goes into making the ranking, they are often more compelling than whether a school goes up or down or where a school ends up on the list.
Here we tease out the ten most astonishing results and revelations from the newest U.S. News ranking.
1) Columbia Reports A Record Jumbo GMAT Average: 736
For a moment, forget about who’s first, third, eighth, or 19th. One stat buried in the U.S. News tables draws particular attention and surprise. It’s Columbia Business School’s average GMAT score: a record 736, higher than any other business school in the world.
For years, Stanford’s Graduate School of Business topped the GMAT charts. But with last fall’s entering class, the school’s average GMAT fell five points to 732 from its record high of 737. Most admission consultants believe Stanford deliberately chose to bring the average down because it was discouraging too many superb applicants from applying to the school. .Stanford’s new average, incidentally, is now shared by Northwestern Kellogg, Wharton, and Columbia.
Wait, you say? How can Columbia have a 732 average when it reported a 736 to U.S. News for its ranking? That’s because U.S. News requires standardizes test scores and undergraduate grade point averages for a school’s entering class to two-year MBA programs. So Columbia’s jumbo GMAT average only applies to students who enroll in its August start, confirms a spokesperson for the school.
Columbia also enters a class in January when the admission stats are less lofty. In fact, when you combine both entering cohorts for the Class of 2020, the overall average slips the four points to 732. A back-of-the-envelope calculation reveals that the average GMAT for the three clusters of 204 students who entered Columbia’s MBA program in January of 2018 was a full 15 points lower at 721 than the average for the eight clusters of 552 students in the August entry class.
There’s no doubt that CBS has placed greater priority on GMAT scores in recent years. As P&Q already reported, the biggest two-year increase in average GMATs for a top 25 school came at Columbia which jumped eight points to that overall 732 average from 724.
All of that effort came with a positive ranking result for Columbia this week. The school’s MBA program climbed three places to rank sixth, up from ninth last year and tenth in 2016. The upshot: CBS had the largest single year-over-year gain of any top ten MBA program.
2) Are Wharton MBAs Really The Highest Paid?
Another stat also popped out this year: The average salary and bonus number for the latest crop of MBA graduates at Wharton. The school’s newly minted MBAs reported a record $165,528. That’s more than Stanford or Harvard, or for that matter, any other U.S. business school.
It’s also the first time Wharton’s pay eclipsed Stanford. Except that it only reflects starting salary and sign-on bonuses, adjusted for the percentage of graduates reporting signing bonuses. If you were to add in other guaranteed compensation and equity awards. In fact, a complete look at MBA pay provides quite a different story, revealing one of the many flaws in U.S. News’ methodology for ranking MBA programs.
At Stanford last year, MBAs reported base salary of $145,559, a signing bonus of $31,146, received by 55% of the graduates, and an expected first-year performance bonus of an eye-popping $64,529, expected by 72% of the Class of 2018. The total of $201,150 is adjusted to reflect the percentage of MBAs reporting sign-on and performance bonuses.
Even more surprising, perhaps, is that the Stanford total does not include the value of stock grants or options, reported by 39% of this year’s graduating class, or reimbursement for tuition or relocation expenses, or a portfolio of benefits and perks that range from auto allowances to 401K match plans. In fact, it also doesn’t include another element of starting pay, ‘other guaranteed compensation,’ that for the first time Stanford decided not to report. Last year, the business school noted that other guaranteed comp average out to a fairly consequential $83,065, received by one in four students. Wharton reported median other guaranteed comp of $30K, less than half the sum awarded Stanford MBAs, but also failed to report on the percentage of its grads, presumably lower, who received that benefit.
In other words, there is no way that Wharton MBAs had the highest pay packages last year, a U.S. News-generated stat that helped to propel the school to top honors from U.S. News.