It’s the big question: Which school confers an MBA with the greatest money-making power? Even those who go to business school wanting to change the world for the better would prefer to be well-compensated while they go about it.
It will surprise exactly no one that the best bang for your B-school buck comes at the elite schools. In 2018, according to data reported to U.S. News & World Report, The Wharton School at the University of Pennsylvania had the top average pay (salary plus bonus), at $165,528. (Wharton also saw the biggest five-year increase in average pay among the top 10 ranked schools, at 16.1%.) Wharton unseats Stanford Graduate School of Business, which was the top school in 2017; a year later, Stanford is No. 2 in the pay sweepstakes, at $162,704, followed by the University of Virginia Darden School of Business ($160,711), Harvard Business School ($159,314), and MIT’s Sloan School of Management ($159,245). The average for the 10 highest-ranked schools: $156,837.
But look a little closer and some interesting wrinkles emerge. For one thing, it’s clear that pay growth is slowing down fast. In a few cases, in fact, it’s going backward.
Five years ago, HBS reported the highest salaries in the top 50, at $144,750. However, that year less than $5,000 separated the top eight schools. Now, that gap is more than $9,000. Last year the “five-year window” number averaged 17.5% for the top 10 schools; this year, it’s 11.2%. The top-10 school with the lowest growth? UC-Berkeley’s Haas School of Business, which saw just a 5% increase in pay from 2014 to 2018; last year Haas’ five-year number was 14.5%. (Haas also has the lowest 2018 average pay among the top 10 schools, at $147,921, more than $17,000 below Wharton.)
It’s worth noting that the data is only as good as the sample size. At Stanford, for instance, only 218 grads reported salary data and another 120 reported bonus numbers. Compare that to Wharton, with 508 reporting salary data and 378 reporting bonus data, or Harvard, where the numbers were 595 and 404, respectively. When the sample is small, a couple of huge numbers can swing the average wildly up or down.
THE PENDULUM SWINGS BACK
But the slowing trend is bigger than a mere statistical fluctuation. Last year when we wrote this story, all 51 schools we looked at could boast positive growth in the average starting pay of their MBA graduates. Only one school last year (Texas-Dallas Jindal) reported base pay of only five figures. Five years previous to that, 12 schools were in five figures; now, the pendulum swings partway back again, as four schools — Purdue Krannert, Pittsburgh Katz, Texas-Dallas, and Rutgers — are in five figures, with two of them getting there as part of a long-term slide: Purdue grads have lost 13.4% from 2014 to 2018, going from $108,426 to $93,927, while Rutgers MBAs have slipped 12.2%, from $105,785 to $92,904. In all there are five schools with negative pay growth between 2014 and 2018, including Boston Questrom, Ohio State Fisher, and Arizona State Carey.
In 2018, 14 schools were above $150,000 in average pay for graduating MBAs. Last year, however, that number was 15. What school backslid? The University of Washington Foster School of Business, which slipped from $151,474 in 2017 to $147,763; but Foster was by no means the only school to lose ground over the last year. In fact all the top 10 schools but two — MIT Sloan and Michigan Ross — saw year-over-year slippage, with Stanford’s the worst, a drop from $173,989 to $162,704, or 6.5%. Columbia Business School also suffered a big loss, going from $163,577 in 2017 to $153,351, more than $10,000, or 6.3%.
As the elite schools jockey for position, the biggest increase in average MBA grad pay over the last five years has come much lower down the top-50 list: No. 22 USC Marshall School of Business many be mired in controversy at the moment, but since 2014 it has seen the greatest jump in MBA pay, 32.7%, from $114,129 to $151,408. Next closest is the University of Florida’s Hough Graduate School of Business, where pay has risen 30.0%, from $94,986 to $121,558. Four schools total in the top 50 saw greater than 20% pay growth from 2014 to 2018; last year, looking at the five-year window between 2013 and 2017, that number was 18.
CALCULATING ROI: TUITION AT THE TOP 25
How much MBAs make coming out of B-school is often offset by what it cost them to get to that point. Using tuition as a baseline — yes, we know the costs are much greater — we see that Columbia has overtaken Harvard as the most expensive school, followed closely by MIT Sloan (see below). CBS’ tuition has risen 17.8% in the last five years, and MIT’s has gone up 16.4% — and Harvard’s has gone up even more, 24.7%. Among the top 25 schools, only Emory University’s Goizueta Business School has seen a bigger tuition increase: 28.9%, to $124,000.
Nine schools have tuition over $140,000. Interestingly, the lowest increase has been at Wharton, the school with the biggest MBA pay, where tuition has climbed only 6.0%. Which makes Wharton the school with the best ROI in 2018.
After Wharton, three other schools have seen only single-digit tuition increases since 2014: Georgetown McDonough (6.1%), UNC Kenan-Flagler (6.1%), and UC-Berkeley Haas (7.4%). And then there’s the strange case of Indiana Kelley, which reported a tuition $80 cheaper in 2018 than 2014. That makes Kelley the only top-25 B-school to actually lower its tuition in that span — or in recent memory. Besides Kelley and the two schools for which information is lacking, the average five-year increase is 14.6%. The average for the top 10 is slightly higher, 15.2%.
See the following pages for a full list of salary + bonus data for the top 50 schools and a side-by-side comparison from five years ago.