Gaudy numbers sometimes obscure larger trends.
In 2020, a newly graduated MBA from Stanford Graduate School of Business accepted a job in financial services in the West for a base salary of $400,000. Two Harvard Business School MBAs reported starting salaries of $375,000 — one of them, notably, at a nonprofit. At Columbia Business School, an international MBA in finance pulled down a cool $375K, as well.
In fact, half of the top 26 business schools in the United States reported select graduates striking it rich with base salaries north of $200K in 2020, while 17 B-schools reported improbably large sign-on bonuses of $100K or greater, according to the data provided to U.S. News & World Report for its 2022 ranking. The latter group includes a UNC Kenan-Flagler Business School MBA who got a $250K bonus, the highest reported.
MBA PAY SLUMPED DURING THE PANDEMIC
But those singular successes distract from the bigger story, which is that MBA pay slumped in the coronavirus year of 2020, growing — where it grew at all — more slowly than previously years and not keeping pace with the relentlessly rising cost of the degree.
Nine schools saw their total pay decline from 2019 to 2020, including two Southern California schools, USC Marshall School of Business (-3.3% from $155,267 to $150,191) and UCLA Anderson School of Management (-2.1% from $151,837 to $148,704); between 2018 and 2019, only one school (Washington Foster School of Business) suffered that fate.
Overall, pay in 2020 increased at a rate of 2.3% for the top 26 schools, less than half the rate it grew in 2019 (4.9%). See page 2 for more data and details, and compare the numbers to available data on tuition and living expenses.
MBA BASE SALARIES: GETTING GRANULAR
Still, we must answer the burning question: What school can boast the highest overall pay in 2020? In a bit of a surprise, NYU Stern School of Business — which countered the trend to grow its MBA pay more than 4% to $175,157 — claims the crown. Stanford GSB, always near the top, is the only other school across the $170K pay threshold, followed by Dartmouth Tuck School of Business ($169,598), Northwestern Kellogg School of Management ($168,837), and Chicago Booth School of Business ($167,909). See above for details.
Poets&Quants is as guilty as any when it comes to sanguine prognostications on the value of the MBA. But that's because there's a lot of history showing the degree's power to improve careers — and with them, lives. Even amid the challenges of a year disrupted by a worldwide pandemic, no other two-year educational journey comes close.
This is more true, however, for U.S. citizens who graduate from U.S. B-schools, something the data reinforces every year. In this way, 2020 was no different. Only five schools in 26 reported a higher foreign than U.S. average salary: Cornell Johnson Graduate School of Management, UNC Kenan-Flagler, Indiana Kelley School of Business, and Georgia Tech Scheller College of Business. But the gap may be narrowing: Last year for this story, there were only two schools with higher international MBA salary averages.
Stanford boasts the highest U.S. salary average, at $168,475, up 7% from the previous year, when it Stanford also had the highest U.S. MBA salary. GSB was followed by HBS ($155,061), Chicago Booth ($149,454), Columbia ($146,375), and Tuck ($146,192). Columbia, meanwhile, reported the highest foreign MBA salary, at $146,244. That's an increase of 3.2% on CBS's mark last year, when it was second to Wharton (we don't know Wharton's or MIT Sloan's data this year because they declined to participate in U.S. News' ranking). CBS was followed on the foreign MBA salary list by Booth ($143,959), HBS ($141,974), Cornell ($139,044), and Stern ($139,024).
In total, the average U.S. MBA salary in 2020 was $137,888, up 2.1% from 2019. The average international MBA salary was $131,709, up 3.6%. In the top 10, the U.S. MBA salary average is $149,065, up 3.6% from $143,911 in 2019, and up about 10% since 2018. In foreign MBA salary, the top 10 schools average $138,532, up 3% from $134,565 and up 8.5% in two years.
MBA BONUSES: GETTING GRANULAR
In terms of salary, it can probably be attributed to the pandemic that so many schools — 21 — saw base salary reporting percentage decline. Similarly, 16 schools were down in the percentage of those reporting bonuses, though seven schools were up.
As far as trends go, MBA bonuses and salaries at the leading U.S. schools are dissimilar in one major way: Foreign MBAs tend to do much better on the bonus front. The number of schools with higher foreign than U.S. average sign-ons is 19 of 26. That number grew from 13 schools last year. Five schools reported $40K or more foreign sign-on average, up from one school last year; zero schools had such lofty numbers to report for their U.S. graduates, in either 2019 or 2020. Nor are the specific numbers less gaudy for the foreign MBAs graduating from the leading programs: While the highest average signing bonus for a U.S. MBA was NYU Stern's $37,077, Georgetown McDonough's foreign MBA average was $44,548. Stanford GSB boasts the highest individual foreign MBA bonus: $175,000.
Overall, the average U.S. sign-on bonus for the 24 schools for which we have data is $31,635, up 2.3% from last year's $30,926. The overall average for international MBAs at the 24 schools was $35,168, up 12.1% from $31,370. In the top 10, U.S. MBAs average $32,720, up about 7%; foreign MBAs average $36,307, up 8.8%.
See the next pages for complete 2020 salary and bonus data for the leading MBA programs in the United States.