Grads from Top MBA Programs Pull in Higher Salaries, Bloomberg BusinessWeek Research Finds
Graduates from top MBA programs in the United States can expect to earn $2.5 million, on average, in base pay and bonuses over the course of a 20-year career, with graduates from the very top programs earning even more, according to recent research commissioned by Bloomberg Businessweek.
For the second year, Bloomberg BusinessWeek asked PayScale, a salary data collection company, to calculate median cash compensation for graduates from top business school upon graduation and again after 5, 10, 15 and 20 years of work. PayScale, which uses online pay comparison tools to collect individual salary data, has a database of 23,000 MBA grads at the top 45 U.S. business schools.
According to PayScale’s data, Harvard Business School graduates can expect to earn the most over their careers – an average of $4 million. Wharton alumni came in second, at $3.5 million, followed by graduates from Columbia Business School, who averaged $3.4 million.
That top B-school brands yield the highest average pay comes as no surprise to some. “The cream-of-the-crop companies hire the cream-of-the-crop grads,” Paul Dorf, managing director of Compensation Resources, a consulting firm that specializes in executive compensation, told Bloomberg BW. “Someone with an MBA from Wharton has a better shot not only at getting a job, but also at getting more money,” he continued.
The data are not without certain limitations, though, Bloomberg BW notes. They don’t include stock or options and rather than track the same graduates over time, they reflect the experience of individuals who graduated at various points throughout the last 20 years. But they do provide a sense of how grads from top MBA programs fare when it comes to compensation over the span of a career.
The research also reveals that the economic downturn has taken a toll on salaries for new grads. The salaries of graduates this year are down about three percent compared with 2009, Bloomberg BW reports. “Being an MBA hasn’t suddenly become the same as flipping burgers at McDonald’s, but there has been a downward trend overall,” Al Lee, director of quantitative analysis at Payscale, told Bloomberg BW.
Of course, starting at a lower base salary – be it due to general economic conditions or because you graduate from a lower-ranked school – could have career-long repercussions. “The differences might not seem like a lot now, but over time, it will be very hard to recoup that lost income,” Compensation Resources’ Dorf told Bloomberg BW. “Over 20 years, the difference will grow exponentially.”
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