Chicago Booth | Ms. Hotel Real Estate
GMAT 730, GPA 3.75
Berkeley Haas | Mr. Hanging By A Thread
GMAT 710, GPA 3.8
Columbia | Mr. Infra-Finance
GMAT 710, GPA 3.68
Georgetown McDonough | Mr. Navy Vet
GRE 310, GPA 2.6
Berkeley Haas | Mr. Well-Traveled Nonprofit Star
GRE 322, GPA 3.0
Harvard | Ms. Comeback Kid
GMAT 780, GPA 2.6
London Business School | Mr. Family Investment Fund
GMAT 790, GPA 3.0
Duke Fuqua | Mr. Vigor
GMAT 740, GPA 3.0
HEC Paris | Ms. Freelancer
GMAT 710, GPA 5.3
MIT Sloan | Mr. Sans-Vertebrae
GMAT 730, GPA 3.78
INSEAD | Mr. Business Manager
GMAT 750, GPA 3.0
Chicago Booth | Mr. EduTech
GRE 337, GPA 3.9
Columbia | Mr. M&A Analyst
GRE 323, GPA 3.4
Harvard | Ms. Analytical Leader
GMAT 760, GPA 3.9
Chicago Booth | Mr. Non-Profit Latino
GMAT 710, GPA 3.06
Darden | Mr. Financial World
GMAT 730, GPA 7.8
Cambridge Judge Business School | Ms. Story-Teller To Data-Cruncher
GMAT 700 (anticipated), GPA 3.5 (converted from Australia)
Kellogg | Mr. Operator
GMAT 740, GPA 4.17/4.3
Duke Fuqua | Mr. Air Force Vet
GRE 311, GPA 3.6
Kellogg | Mr. Engagement Manager
GMAT 700, GPA 3.2
Cornell Johnson | Mr. Top Performer
GMAT 730, GPA 3.3
Harvard | Mr. STEM Minor
GMAT 740, GPA 3.78
Harvard | Mr. Fresh Perspective
GRE 318, GPA 3.0
USC Marshall | Mr. Supply Chain Guru
GMAT GMAT Waiver, GPA 2.6
Wharton | Mr. MBA When Ready
GMAT 700 (expected), GPA 2.1
HEC Paris | Mr. Productivity Focused
GMAT 700, GPA 3.6
MIT Sloan | Mr. Energy Transition
GMAT 760, GPA 3.95

GMAC Reports Its CEO Was Paid Nearly $1.9 Million

GMAC President and CEO Sangeet Chowfla

In a year when revenue is flat and you’re losing market share to your top competitor, you might not expect the Chief Executive Officer to get a sizable raise. But Sangeet Chowfla, president and CEO of the non-profit Graduate Management Admission Council, which administers the GMAT test, saw his total compensation rise by a whopping 81% to nearly $1.9 million.

According to documents filed with the Internal Revenue Service, GMAT reported that Chowfla was paid $1,862,158 in salary, bonus and benefits in 2017, the latest year for which data is available, up from $1,028,783 a year earlier. Most of the increase was the result of a mammoth $1,150,000 bonus. But the former tech executive, who took over the reins of GMAC as CEO in early 2014, also saw a handsome increase in his base salary. Chowfla’s base rose to $539,950 in 2017, a hefty 22% jump from the $441,734 he was paid a year earlier.

In comparison, the CEO and president of the Educational Testing Service, a nonprofit that is more than 14 times the size of GMAC, made just under $1.2 million in fiscal 2017, less than $700,000 Chowfla’s total comp. ETS, which administers the rival GRE test among others, paid CEO Walter D. MacDonald $1,158,464 in pay and benefits when the organization’s total revenues were $1.4 billion.


A spokesperson for GMAC, Geoffrey Basye, says the compensation reported for CEO Chowfla by GMAC includes “double counting” of pay that had been previously reported in earlier form 990 filings. “In the tax period reported on our most recent 990, GMAC’s Board of Directors implemented changes in the compensation structure for the CEO, transitioning to a more variable, performance-linked system,” says Basye. “Because of IRS rules and regulations, this change created a double reporting of compensation.  The result was Sangeet’s long-term bonus (2014-2016) being reported twice, once in the year that it was accrued and again the year that it was paid.”

Basye explains that Chowfla’s reported compensation in 2017 includes $880,000 of compensation that had already been reported in previous years as well as $125,000 of an accrual that will “only be paid out upon the achievement of specified long term objectives set by the board for the 2017-2019 evaluation period.”

The reported pay, moreover, occurred in a year in which GMAC’s total revenues were flat and the organization’s surplus (or profit) fell to $3.6 million from $4.9 million in 2016. If not for the income of $2.7 million from its investments and another $3.5 million in revenue booked from the sale of securities, GMAC would have had operating loses of more than $2.7 million. Basye, however, maintains that the IRS’ reporting requirements are “not an accurate reflection of operating income or loss. GMAC’s audited financials, prepared according to US GAAP, show a positive EBITDA of $4.8M for 2017.”


Total GMAC revenues came to $97,364,259 in 2017, just a tad above $97,292,315 in 2016. It is also during a time when GMAT continues to lose market share to GRE which has become more popular among business school aspirants.

The deterioration in the organization’s financials, as they are reported in IRS filing, has been felt particularly in the past two years In 2015, GMAC reported a surplus of $13.6 million on total revenue of $101.2 million. But the number of $250 GMAT tests taken has fallen by 4.4% to 279,947 in 2017 from 292,753 a year earlier as fewer people apply to two-year, full-time MBA programs, more graduate business programs waive standardized tests, and more applicants are taking the rival GRE to get into business school.

Chowfla’s reported total compensation was so large in 2017 that it would have taken nearly 15,000 GMAT test takers, paying the customary $250 a piece, just to equal his pay and benefits for one year. In 2017, GMAC’s profit margins on its test operations were 49.7%.


Since the former Hewlett-Packard executive’s arrival as president in September of 2013 and his taking over as CEO in January of 2014, Chowfla has pursued a diversification strategy that has led to several acquisitions. In January, GMAC acquired The MBA Tour, which conducts more than 60 MBA admissions events per year in over 30 countries (see GMAC Buys The MBA Tour). He also acquired the NMAT test in India in 2015 (see GMAC Acquires An Indian Entrance Exam) and BusinessBecause, a business school website in the U.K., last year (see GMAC Buys A Business School Website). All the acquisitions were made for undisclosed sums.

Basye says the strategy shift has been endorsed by GMAC’s board. “The GMAC Board of Directors has charged Sangeet with ensuring GMAC’s long-term sustainability by reducing its reliance on the GMAT test alone and entering new lines of service consistent with our mission to provide solutions for business schools and candidates to discover and evaluate each other,” says Basye. “During this period, revenues from non-GMAT sources grew and have continued to accelerate in subsequent years.”


About The Author

John A. Byrne is the founder and editor-in-chief of C-Change Media, publishers of Poets&Quants and four other higher education websites. He has authored or co-authored more than ten books, including two New York Times bestsellers. John is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, editor-in-chief of Fast Company, and the creator of the first regularly published rankings of business schools. As the co-founder of CentreCourt MBA Festivals, he hopes to meet you at the next MBA event in-person or online.