A generation ago, experts would urge you to enter law, banking, or medicine. These were “safe” fields, respectable and high-paying, immune to grim business cycles. If you washed out, there was always a safety net in insurance, real estate, or “plastics.”
Follow your passion? Make a difference? Live a life of purpose? That’s why you have the Peace Corps or Teach for America, people would quip. In those cases, you’d drop out for a few years, pursue your ideals, and then return to the fold. Perfectly acceptable. Of course, that model has flipped now. Today’s experts champion embracing discomfort, taking risks, and living authentically. Call it what you will: balance, mission, or fulfillment. When you set out on a career, you expect something deeper than phat paychecks and parental approval.
KNOWING WHAT YOU’RE WORTH
“If you’re good at something, never do it for free.”
That’s the Joker’s mantra. Sure enough, that crazy clown is right – especially when it comes to MBAs. You didn’t spend two years in class to take a pledge of poverty. You have debts to pay and lost income to recover. Fact is, employers expect MBAs to make an impact, to bring new ideas and best practices – not to mention all-inclusive decision-making and leadership prowess. That’s not easy to find. Doesn’t it make sense to maximize your earning power?
You start by knowing just how much you’re worth. That’s not a one-size-fits-all proposition. Compensation varies by industry, company, and role. Let’s not forget the influence of geography in shaping pay too. While top companies are known for giving standard packages, that doesn’t mean business school pay charts match across industries. Each program attracts a different mix of employers – and pay doesn’t always align by rank.
PAY DOESN’T ALWAYS FOLLOW RANK
Take General Management. This is obviously Harvard Business School’s domain, right? The school is known as the “West Point of Capitalism” after all, where students consume hundreds of cases to hone their ability to wade through data, weigh options and outcomes, and defend their decisions under a flurry of questions. All true, but Stanford MBAs who enter general management still earn $10K more in base than their HBS peers (who also made less than general managers from the Wharton School and U.C.-Berkeley – and barely a thousand dollars more than BYU Marriott MBAs).
In other cases, rank and pay closely correlated. In Finance, Stanford GSB grads notched the highest bases in any category – a long-standing tradition – at $159,397. This was nearly $10,000 more than HBS grads who entered this field received. The Wharton School and Columbia Business School lived up to their reputations as finance schools, ranking 3rd and 4th at $146,477 and $136,745 respectively – numbers no doubt accentuated by their deep networks and prime locations on the East Coast. That doesn’t mean there weren’t outliers. Virginia Darden consultants, for one, earned nearly identical bases as higher-ranked programs like Chicago Booth, MIT Sloan, and Northwestern Kellogg. Although USC Marshall isn’t regaled as an Operations juggernaut, their 2018 grads pulled in $128,889, just $5,000 less than MIT Sloan, the standard-bearer in the field.
That said, USC Marshall placed nine graduates in Operations in 2018, just a fourth of the number from MIT Sloan. Such differentials can skew apples-to-apples pay comparisons to an extent. As P&Q has noted in the past, median occupational pay doesn’t necessarily paint a full picture. For one, U.S. News & World Report reports sign-on bonus as a lump sum across all concentrations, leaving out pay that can range from $20,000-$50,000. The same is true of the ever-hazy “Other Guaranteed Compensation.” A catch-all enjoyed by a minority of graduates, this category – often unreported – includes perks like stock options, tuition reimbursement, profit-sharing, and 401K matches that can fatten pay package substantively over the long haul.
LETTING YOU KNOW HOW HIGH COMPANIES WILL GO
So why care for base pay? For one, it is fixed and recurring, a consistent forecast of what to expect over time (with an additional 5% per year overlay). Sign-on bonuses are one-time inducements. Performance bonuses and additional compensation are negotiables that go under scrutiny with each budget review or regime change. Bottom line: Base pay is a reflection, school-by-school, of what the market is willing to pay upfront – a starting point for negotiating your pay package.
At the same time, the data includes highest base pay by school and industry, an indicator of just how high employers may go to land coveted MBA talent. Marketing is a perfect example. Here, Northwestern Kellogg has been lionized as the top MBA program in marketing, owing to its rock star faculty, prolific research, and an exhaustive list of electives and extracurriculars in the area. Despite this, Kellogg ranks 6th for the highest individual base. The winner in this category was Harvard Business School, where one graduated sported a $240,000 base. That doesn’t mean the highest-ranked schools always top out, however. In General Management, a Georgetown McDonough grad collected a $180,000 base – besting every 2018 management graduate from the University of Chicago, MIT Sloan, and Columbia Business School. In other words, these pay numbers don’t just reflect the possible pay at your target school, but also those that are ranked around them.
To see how your target schools fare in base pay in particular industries – along with how low, average, and high pay has changed over the past three years – click on the links below.
Editor’s Note: Class of 2019 pay data will begin to trickle out during the fall.