What The Class of 2012 Made This Year

by on November 11th, 2012

If you still need evidence that a highly ranked MBA degree is worth the investment, look no further than this year’s starting median salaries. While it’s true that in most cases year-over-year starting salaries for MBAs have remained flat or shown meager growth, the impact of the degree is that it significantly boosts your pre-MBA pay.

This year’s MBAs reporting the largest percentage increases over their pre-MBA salaries graduated from Michigan State’s Broad School (a whopping 268.6% increase from what they had earned before getting the degree), Notre Dame’s Mendoza School (up 148.8%), the University of Minnesota’s Carlson School (up 132.2%), the University of North Carolina’s Kenan-Flagler Business School (up 122.2%), and Indiana University’s Kelley School (up 119.6%). And these numbers exclude starting bonuses and other bennies that are often handed out to MBAs when hired.

MBA graduates from Stanfors, Harvard & Wharton reported the highest median salaries

While graduates of Stanford, Harvard, and Wharton earned the highest median salaries, their increases over pre-MBA pay were much smaller because they entered their MBA programs earning significantly more money–a sign of the high caliber of the incoming students. At Stanford, where grads landed jobs with median salaries of $125,000, the highest of any school, MBAs experienced a 38.9% increase over their pre-MBA pay. At both Harvard and Wharton, where median salaries were $120,000 this year, the increase was 33.3%.

Not bad, of course. Just not as eye-popping as some other business schools that are enrolling students who had earned less. That occurs because MBA starting salaries are, by and large, similar across most of the top schools, even though students entering lower ranked schools typically make less money. Moreover, graduates from schools with the best brands usually receive greater non-salary compensation. At Harvard Business School, for instance, three of every four graduates this year reported getting a median signing bonus of $20,000 and one in five (21%) reporting median “other guaranteed compensation” of $25,230. Harvard MBAs lucky enough to collect all three (base, sign-on bonus and guaranteed comp) earned first-year median pay of $170,230.

The median salary numbers, reported by the business schools to Bloomberg BusinessWeek, are for BW’s top 30 U.S. schools. So it’s likely that there are other schools that have similar returns for their MBA graduates. The magazine did not report the statistics it has gathered for schools outside the U.S. or for other schools that are not ranked among its top 30 list.

Year-over-year starting salaries were generally flat despite the hefty increase over pre-MBA pay

BusinessWeek reported that the inflation-adjusted growth rate for the median salary of each school’s graduates “is not rosy. At about a third of the 30 to-ranked schools, the median growth rate was negative, meaning salaries have either fallen, or budged by less than one percent, over the last three years.” Year-over-year median salaries remained flat at Stanford, Harvard, Wharton, Columbia, and Yale’s School of Management, among many other schools.

A few schools nicely bucked this trend, reporting that their MBAs saw increases in salary over last year. The University of Chicago Booth School, for example, said its graduates landed median salaries of $115,000 this year, up from $107,000 last year and $102,000 in 2010. Duke University’s Fuqua School reported that its 2012 MBAs had median starting salaries of $110,000, up from $101,400 last year and $100,000 in 2010.

Some 22 of 30 schools reported at least a 50% increase in pre-MBA pay for their graduates

Even so, the increases over pre-MBA salary remain impressive–and at many schools are astonishing given the still uncertain economy in the U.S. At seven of the 30 schools, graduates either doubled or more than doubled their pre-MBA pay. At 22 of the 30 schools, graduates reported at least a 50% increase in starting pay–and again these figures do not include signing bonuses, guaranteed year-end bonuses, or tuition reimbursements.

Source: Bloomberg BusinessWeek as reported by schools



  • Thank you for a great article.  It makes sense that "less-elite" schools will deliver higher percentage gains in average (pre-bonus) salary, since pre-MBA salaries are so much higher at, say, Harvard than at Michigan State.  Good stuff.

    I'm struggling with some of the numbers, though.  I don't mean any disrespect to Michigan State—it’s an underrated program, with great supply chain management curriculum--but that salary increase figure seems awfully fishy.  

    If Broad MBA graduates enjoyed a 268.6% post-MBA pay increase, then their median pre-MBA salary would be under $24,000!  And that doesn't seem too likely. Maybe there was a reporting error somewhere, or a typo?  A 168.6% increase seems doable, but a 286.8% increase in salaries after just two years?  That sounds too good to be true!

  • I wish there were reports of schools that were not in the top 30.  How do grads of state universities do for instance?

  • Jasper, some of the state schools are included in Forbes' biennial rankings, which list the top 75 schools in terms of ROI.  The 2011 rankings can be found here: http://www.forbes.com/lists/2011/95/best-business-schools-11_rank.html

    The data isn't presented in quite the same way as in John Byrne's article, but it should give you some information on at least a few more schools.  

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