It’s all about the Benjamins. Want an elite payday? Go to an elite business school. That’s a reality unlikely to be altered by any pandemic. But if you can’t afford to go to Harvard or Wharton or Stanford — or, just as likely, can’t get in — an MBA from another top-50 U.S. B-school still packs a powerful pecuniary punch.
That’s the clear lesson in a Poets&Quants analysis of 2019 pay data from U.S. News & World Report‘s latest ranking, released in March. To dispense with the obvious: The ranking’s top five schools for average starting pay — starting salary plus signing bonus — are all big names, led by No. 1 Wharton School at the University of Pennsylvania, at $172,016. Next in line are No. 10 New York University Stern School of Business ($168,291), co-No. 1 Stanford Graduate School of Business ($168,226), No. 12 Dartmouth College Tuck School of Business ($166,251), and No. 11 University of Virginia Darden School of Business ($165,292).
No real surprises there. In all, 12 schools in the top 25 of the ranking report pay above $160,000, and 17 above $150,000. But look up and down the ranking, from the upper tier to the four schools tied at No. 48, and you’ll see that six-figure pay is the norm for graduating MBAs. Five figures is the exception. The lowest reported average starting pay at a top-50 school is $75,869 at the University of Alabama’s Manderson Graduate School of Business, ranked 41st — but Manderson is one of only three schools with a five-figure average, the others being the University of Arizona Eller College of Management ($94,084), ranked 46th, and the University of Utah Eccles School of Business ($97,627), 48th. (See pages 2 and 3 for tables with average starting pay at the U.S. News top 50.) Six years ago, in 2014, there were six top-50 schools with starting pay under $100K
SPEND MONEY TO MAKE MONEY? NOT ALWAYS
What is the up-front cost of the degree that makes such salaries and bonuses possible? The answer, as anyone who has researched or pursued an MBA, is quite a lot at the high end — see the chart below.
However, costs are much more reasonable lower down the ladder. The top-50 ranking is littered with schools that cost $20,000, $30,000, $40,000 in annual tuition yet have six-figure payouts for newly graduated MBAs. At Michigan State University Broad College of Business, for example, ranked No. 40, out-of-state tuition is around $52,000 per year and starting pay averages more than $120K. At the University of Rochester Simon Business School, ranked 35th, yearly tuition is $47,000 and the average starting pay is about $142K. The list goes on: No. 27 Georgia Tech Scheller, $40,752 out-of-state tuition, $141,533 payday; No. 28 Florida Warrington, $30,130 out-of-state, $121,554 in the bank account; No. 46 Tennessee-Knoxville Haslam, a mere $29,656 out-of-state, and a nice pay package of $111,780 two years later. (Yes, there are other costs to attending these schools, such as room and board — but we guarantee life in Knoxville is cheaper than in Palo Alto. And it’s also true that MBA jobs commonly offer other compensation, such as stock options, that most schools have stopped tabulating.)
Once you’ve graduated with an MBA, what can you expect to make? That depends (somewhat) on your citizenship. Here’s a look at salaries at the top 25 schools, broken down by U.S. graduates versus their international colleagues.
BREAKING DOWN THE NUMBERS AT THE TOP 50
And here’s a breakdown of salary and bonus data at the top 50. In all, only one school eclipsed the $150K threshold, Stanford, with a starting base salary of $152,503. Four schools reported averages of $140K or more, and 13 of $130K or more. After Stanford is Wharton at $147,339, Harvard Business School at $146,422, Columbia Business School at $142,132, and the University of Chicago Booth School of Business at $139,725. The average salary for a MBA from a top-10 school is $140,760, and for the top 26 $132,347. Just seven schools, all in the latter third of the top 50, reported five-figure base salaries.
Signing bonuses look healthy up and down the ranking. Fifteen schools reported averages over $30K, and only two reported four-figure bonuses. The average for the top 10 is $32,011, and not much lower for the top 26 ($30,870). The biggest bonuses are at Stern ($38,214), USC Marshall School of Business ($37,925), Cornell University Johnson Graduate School of Management ($35,967), and Wharton ($34,588) — but here again the lower-ranked schools can surprise, as in the case of Rochester Simon ($26,702), Georgia Tech Scheller ($28,202), Notre Dame Mendoza College of Business ($28,293), and a handful of others.
The smallest average bonus in the top 10 was reported at Stanford ($28,328), which can be attributed to the school’s role as a startup hub; in the top 25, Indiana University Kelley School of Business ($23,764) notched the smallest extra comp.
(Note that while the bonus and salary data on pages 2 and 3 do not appear to equal the cited pay figure, that’s because U.S. News takes into account the percentage of MBAs reporting a bonus and adjusts accordingly.)
18%+ AVERAGE PAY GROWTH IN TOP 26
For fun, we decided to compare 2019 pay data to 2014. In those six years, of course, every school’s average pay increased, by a little or by a lot; the biggest jump by dollars was at USC Marshall, $41,138, while the biggest jump by percentage was at Rochester Simon (39.4%). In the top 10, NYU Stern saw the biggest increase in both dollars ($32,358) and percentage (23.8%); the smallest pay growth was at MIT ($17,355 and 12.1%. In the top 25, the smallest increase in pay was at Michigan Ross ($16,691 and 11.9%). But the smallest overall came at Boston University Questrom School of Business, which grew its MBA average starting pay by $8, from $108,558 to $108,566. That’s 0.00007% growth.
Eighteen schools saw a 20% jump or bigger; four were in the top 10, and 10 were in the top 26. And four schools had greater than 30% pay growth, with USC Marshall the highest-ranked. The average jump over six years in the top 26 was $24,610 and 18.9%; in the top 10, $25,002 and 18.1%.
See the next pages for a complete breakdown of salary and bonus data at the top 50 U.S. B-schools.