15% Of Harvard MBA Students Took A Leave Of Absence At COVID's Peak

HBS MBA Student studying between classes. Photo: Hensley Carrasco

Overall, two charts in the annual report pretty much tell the enviable story of Harvard Business School during the pandemic. One chart breaks down the school’s annual revenue in fiscal 2021; the other details its annual expenses (see below).

Source: Harvard Business School 2021 Annual Report

The largest source of revenue in fiscal 2021 came from the school’s publishing operations which accounted for just over a third of Harvard Business School’s total revenue. It was followed by income from the school’s endowment and gifts. In fiscal 2021, total revenue from the school’s three philanthropic sources— distribution from the endowment, unrestricted current use gifts, and restricted current use gifts—increased to $244 million from $233 million. This revenue amounted to 30% of the school’s total revenues, compared with 27% a year earlier. The School’s annual endowment distribution for fiscal 2021 increased 6% from the prior year to $184 million, amounting to 23% of total revenue. HBS said the endowment payout rate for 2021 was 5.2%.

Source: Harvard Business School 2021 Annual Report

Not surprisingly, the biggest expense at Harvard Business School comes from salaries and benefits for its faculty and staff. Half of all of the school’s $779 million expense budget went to this line item.

“Compensation for faculty and administrative staff is the largest expense at HBS,” noted Melnick. “The school’s salaries and benefits expense for fiscal 2021 increased 3% to $386 million, from $375 million in fiscal 2020. This represented 50% of the school’s total operating costs, compared with 45% in the prior year . The increase was driven by investments to grow the HBS faculty. The change in salaries and benefits also was influenced by the resumption of the bonus program and, to a lesser extent, a voluntary early retirement program for staff with a minimum of 10 years of university service.

Melnick added that 2021 was a strong year for faculty recruiting and promotions. “In all, 13 candidates accepted Assistant Professor positions, and another six faculty members received promotions to associate or tenured positions. The total number of faculty, as measured in full-time equivalent (FTE), can rise or fall in any given year reflecting retirements, de- partures, and fluctuations in recruiting activity. Net of retirements and departures, the size of the HBS faculty increased to 256 FTEs in fiscal 2021, from 244 FTEs a year earlier. The school’s administrative staff grew to a budgeted 1,871 FTEs in fiscal 2021, from 1,839 in the prior year.”

DON’T MISS: HARVARD’S ONLINE COURSE REVENUE NEARLY MATCHES ITS TRADTIONAL EXEC ED BUSINESS or HARVARD REFUNDED NEARLY $5 MILLION IN TUITION TO MBA STUDENTS