The Million Dollar MBA Of The 2012 Class
What is even more surprising is that it didn’t happen at a Harvard or Stanford or Wharton. Manchester Business School in Britain is reporting that one of its graduates from the Class of 2012 got a job in financial services for the largest reported starting salary in history for a freshly minted MBA: $1,088,638.
That’s more than nine times the $120,000 median starting salary of a Harvard MBA this year. And the million-dollar jackpot merely represents base salary, not a lot of the other goodies that are often dangled in front of the best and brightest MBAs: signing bonus, stock options, guaranteed year-end bonuses, or tuition reimbursements.
The Manchester starting salary is nearly double last year’s highest reported number
To give you a sense of just how extraordinary this number is, last year highest reported starting salary was for an MBA who graduated from London Business School. That graduate got a whopping $552,681-a-year job in the corporate sector in Australia.
In all probability, however, last year’s highest paid MBA hailed from Dartmouth College’s Tuck School of Business. The graduate entered the private equity field with a total compensation package of a mind-boggling $863,000.
Jonathan Masland, director of career development at Tuck, then said the big number was a new record and captured by a Tuck grad who did an independent job search. “That is the largest number I’ve seen,” he said. “In private equity, there is a performance structure that can be a lot. A really top MBA based on professional background would participate in the carried interest which can be substantial. That is part of typical private equity compensation.”
Salary numbers are self-reported to the business schools
As is always the case, these numbers are self-reported by recent graduates to their business schools. The schools typically double check numbers that are on the extreme. To protect the confidentiality of the MBAs, the schools only disclose the base details of both the compensation and the industry in which the graduate landed the job. Manchester’s career services Director Clare Hudson was on holiday and could not be reached for comment. But the MBA who hit the salary lottery didn’t go to one of the school’s top employers this year led by American Express, KPMG, McKinsey & Co., and Johnson & Johnson. The lucky grad, moreover, pushed the average starting salary for Manchester MBAs who went into financial services to $143,196, from a more typically figure in the mid-80s.
The full employment reports for most business schools will trickle out in December and January. However, a few of the early numbers were reported by some schools to Bloomberg BusinessWeekfor its recent rankings project. Fordham University told BusinessWeek, for example, that its highest paid MBA graduates from the Class of 2012 reported a $500,000 starting salary in real estate and a $300,000 salary in non-profit management.
Most schools try to downplay these numbers so as not to raise unrealistic expectations. Harvard Business School, for example, does not report the high and low salary ranges for its MBAs. Instead, the school reports the 25th percentile salary and the 75th percentile. This year, the highest 75th percentile salary Harvard is reporting is for $200,000 for a graduate in the private equity or leveraged buyout field.
By and large, the highest-starting salaries these days are being paid by private equity firms and hedge funds, which recruit far fewer MBAs than the elite consulting firms and investment banking partnerships that buy MBAs in the boatloads. This year, consulting firm McKinsey & Co. hired more than 550 MBAs, while Deloitte Consulting brought aboard 450 worldwide from some 40 schools.
Highest paid MBAs are almost always special cases
The very highest paid MBAs tend to be special cases, more often than not in private equity or hedge funds. To these first MBA jobs, they bring extraordinary work experience and track records that convince firms who want to hire the absolute best and brightest that they are worth the money.
In private equity and hedge funds that means hiring grads who already have been in the business–often as high-performing analysts for the same companies that hire them back.
“They are usually people who have done it and are going back in,” says Maryellen Reilly Lamb, director of Wharton’s Career Management Center. “These are not the average MBAs who are switching careers.”
The Manchester MBA who broke through the million dollar barrier was one of just 24 MBAs who gained jobs in financial services this year out of total full-time MBA class of just 91 graduates.