What An MBA Employment Report Won’t Tell You

When it comes to reporting compensation, business schools have become highly conservative. You’ll find the average or median starting salaries of their graduates and sign-on bonuses. But one important element of pay that is largely invisible is equity awards, either in the form of restricted stock or stock options.

Yet, stock compensation can account for as much as 70% of total compensation, particularly at startups, early stage companies, and tech companies. Merely reporting “base salary” and “sign-on bonus,” as most MBA employment reports do, can impose a pretty large discount on the actual total MBA compensation at business schools that send a lot of grads into tech.

Even so, the MBA employment reports from Harvard, Wharton, and MIT Sloan are all mum on the subject. So are the employment reports from other top-tier business schools, including those that send a substantial number of graduates into tech companies where stock awards are most prevalent.


Two of the few business schools that provide a peek at stock awards are UC-Berkeley’s Haas School of Business and Stanford Graduate School of Business. In its 2021 employment report, Haas reveals that 42.6% of its MBA graduates were awarded stock options. At Stanford, some 41% of the graduating class last year landed stock-based compensation.

Haas assigns no value to those equity awards. And that’s not surprising. Stock compensation is hard to value because it is a moving target. Its value moves up and down with the market and a company’s fortunes. And it’s far more likely that an MBA would get stock compensation on the West Coast and other tech centers. It also helps to explain why so many MBAs now go into tech, despite the lower starting salaries being paid by those firms.

Last year, 28% of the graduating MBAs at Stanford landed jobs in the technology industry which paid the lowest average salaries of any industry: $144,500, well below the class average of $160,000. For the 41% of Stanford’s MBAs who were given stock by their mostly tech post-MBA employers, those stock options and grants more than made up for the salary deficit.

While not providing a percentage of the Class of 2021 who received stock options or outright awards, MIT Sloan notes that it includes those compensation elements in a category it calls “other guaranteed compensation.” Last year, 70.5% of the graduating MBAs reported receiving this form of pay, with the average amount coming to $65,064.


But as a Google product manager with an MBA from Haas tells Poets&Quants, if more than 40% of the MBA grads out of Haas are handed stock options, the total compensation of $177,471 in starting salary and sign-on bonus would be substantially underreported. On the low end, those stock options could drive up total compensation for an MBA to $231,712 or as high as $301,701.

To gain some deeper insights into this hidden aspect of MBA compensation, we turned to RelishCareers.com, which collects pay data from MBA graduates. The firm analyzed 2,541 post-MBA positions in its database from 2017 to 2022. "We found just 12.2% of them included stock compensation," says Zach Mayo, co-founder and chief operating officer of Relish Inc. "By contrast, 17% of positions included a signing bonus, and 60% of positions offered some type of performance bonus in addition to an annual salary."

Not all schools send a high number of students into tech roles, of course. Those that do are will have graduates who are far more likely to receive stock compensation from the very beginning. The Relish numbers, therefore, are based on all the MBAs in its database, not merely those who work in the tech industry.


"On average, stock compensation accounted for 12.4% of overall compensation packages where it was reported, with packages on the low end accounting for less than 1% of total comp and those on the high end accounting for 60% or more," adds Mayo. "The average reported monetary value of stock compensation was $32,947."

Mayo also found that total compensation was much higher overall for those whose packages included stock compensation than for positions without stock-based comp: $217,258 vs. $124,841. That's because it turns out that MBAs who earned stock rewards tended to get more salary and bonus money as well. The average annualized salary for positions that included stock compensation was $136,093; for positions without stock compensation, the average was $103,745. The difference in overall comp of $92K is comprised of $32K in additional salary + $32K stock compensation + $28K in additional bonuses.

"This indicates that employers are typically deploying stock compensation offers to lure high-value recruiting targets in more competitive markets," he says. "Our analysis of industries and functions adds further weight to this hypothesis: stock compensation is particularly prevalent in the tech industry, and the most common job function to include stock compensation is product management. Not surprisingly, our list of the top ten employers is populated almost entirely by tech or tech-adjacent firms."

They include firms such tech giants as Amazon, Google, Microsoft, Adobe, Intel, Genentech, and Oracle. But there are surprises, too, with MBAs at Accenture, Wayfair, and Airbnb reporting stock compensation (see table above).

"The overall picture produced by our analysis suggests that, like signing bonuses, stock compensation is strategically used by recruiters in highly competitive industries to attract top talent for their most high-value positions," says Mayo.

RelishCareers is the virtual recruiting platform for master’s degree candidates and the companies that hire them. Sign up at https://www.relishcareers.com/ to receive relevant recruiting emails and use the platform to research compensation & culture data, employer branding & opportunities, connect with employers, and apply for positions. With over 50,000 jobs and 2,500,000+ compensation and cultural data points across a database of 15,000+ employers, RelishCareers is the virtual recruiting resource for master's degree job candidates.