MBA Starting Salary

Attending a highly ranked business school does not guarantee a high starting salary.  There is a relationship between a schools’ average salary and its position in the popular rankings (US News, BusinessWeek); however, a schools average salary is not a good predictor of an individual’s expected salary.  Take Wharton for example.  The employment webpage reports that starting salaries for 2007 MBA graduates averaged $110K with a range of $28K to $392K.  Someone expecting to earn the $110K average at Wharton would probably be a little disappointed with $28K.

Now don’t throw the baby out with the bath water.  In the right context, salary data can be useful in selecting a business school.  To help build this context, you may want to consider the following elements when analyzing salary data:

Compare salaries at the industry level – average salaries vary across industries and the mix of industry placement varies by school.  Consider a student interested in investment banking who is deciding between Darden and Harvard.  At first glance, the average overall salary at Darden is $100K (data) compared with $115K at Harvard (data), indicating that the student may prefer Harvard.  However, the average salary for investment banking jobs is the same for both schools: Darden – $95K, Harvard – $95K.  One contributor to the difference in overall salaries is the larger portion of students who enter into investment banking at Darden than at Harvard (15% vs. 11%), which effectively lowers Darden’s average overall salary.  Therefore, salaries should always be compared at the industry level to factor out the effect of dissimilar industry mixes between schools.

Account for geographic trends – in much the same way that a student body’s industry mix will affect average salary, the geographic mix of jobs will impact a schools average salary.  For example, international jobs tend to have a lower salary and can pull down the overall average.  While probably not a major factor, looking at where students accept jobs will provide a better understanding of the schools’ salary data.

Consider student demographics – a student’s work experience can significantly influence their starting salary.  For example, someone who worked in consulting for 5 years before returning to business school will probably secure a higher starting salary than someone with 3 years experience in an unrelated industry.  Business school can help equalize differences in past experience; however, employers will still offer higher salaries to candidates with more relevant experience.  Thus, attempts should be made to identify the impact of a student body’s work experience on the schools’ average salary.  In light of the qualitative nature of work experience, reviewing a school’s class profile and thinking in terms of directional influences might be the most practical approach.

In consideration of these factors, it seems that marginal differences between businesses schools in average starting salaries (less than $10K) could be fully attributed to differences in student body demographics.  Perhaps a research study could attempt to isolate and quantify the impact of ‘MBA brand value’ on starting salary.  In the meantime, we seem to have overemphasized the importance of business school selection in determining an individual’s starting salary.

21 Responses to “MBA Starting Salary”

  1. David says:

    What about 5 or 10 year salary data? I have not been able to find a lot on this.My current thinking is that connections that an individual makes during their time going for an MBA would have a large impact of longer term salary gains. You would not be able to break the data down as specifically as first job out of an MBA, but could be insightful. What do you think? Would have Harvard graduate have better 5-10 year salary than a Darden graduate?

    • Bill Gray says:

      Hi David,I have not had any luck finding long term salary data for business school alumni. Darden completed an alumni survey a couple years back, but I'm not really sure what was included. Also, I would expect there to be significant variation in alumni surveys between schools, compared to the starting salary data which is regulated by a consortium.As to which school has a higher salary average 5 to 10 years out, I wouldn't hazard a guess. One thing about averages is that they are easy to skew. For example, Michael Bloomberg went to HBS and probably significantly raises the average alumni salary (Bloomberg's net worth is around $5.5B). Although, due tax planning his salary could be surprisingly low.I think the important aspect of your question is assessing the value of connections made in business school. One thing that helps students at both Darden and Harvard is the case method, which provides classmates with more interactions through learning teams and class discussions. Another consideration is the size of the alumni network. Harvard is definitely favored with regards to scale, which results from the larger class size at Harvard (900 students) compared to Darden (320 students). However, while a larger alumni network means more connections, the strength of those connections may not be as good. For example, Michael Bloomberg or George Bush might not help someone out just because they are a fellow HBS alumni. From my experience, the Darden alumni have been very supportive of current students during the recruiting process. I remember last year when a fellow first year student emailed an alumni about a possible job position. Since the alumni was the CEO of a $1B+ revenue company, my classmate was surprised when the Alum invited him to come for a one-on-one meeting later that week. As a second year student, I have come to expect this level of support from our alumni and plan on providing it to students as a future alumnus.

      • David says:


        Just was reading through some MBA stuff and found this link (

        Title: “MBA Pay: A Crystal Ball – Exclusive new research shows how much graduates of top business schools earn over the course of their careers ”

        We were both right, not a whole lot has been done in the area, but this ‘new research’ sheds a bit of light on it. As you said, it should be taken with a grain of salt since a person can “get the facts, then distort them as you please”. That said, it is an interesting read.

        Full link: (

  2. Truth says:

    Believe me, no one, I mean NO ONE (including you, had you been accepted to any of the schools mentioned) would EVER choose to go to Darden over Harvard, Stanford, Wharton, MIT or Chicago. Rankings aside, anyone from industry will tell you this is a no brainer. A strong barometer for judging the worth of your degree is looking at the yield rates of these schools – percentage of students accepting offers once admitted, called REVEALED PREFERENCES. UVA – Accepts 41%, of which 45% enrolls. Harvard – Accepts 14%, of which 91% enrolls. Does this make sense to you? Where is the remaining 9% of the students going? DEFINITELY NOT TO DARDEN.

    • Vika says:

      What an insightful comment. Glad to know you're out there in case I ever need help making a decision. I didn't realize rankings are the end all be all. And might you be so kind and let me know, since you DEFINITELY have that knowledge where those 9% are going?

    • Mike says:

      The pretentious nature of this comment does not speak well of whichever program you are considering attending, currently attending, or have attended. Why on earth do you think that yield is the best barometer? Funny how people choose to highlight the metric at which their program excels. I think yield is reflective of a degree of herd mentality. Darden is 4th in Forbes, and this is because it boasts an exceptionally high Return on Investment (ROI). The best advice anyone could receive is not to attend a program based on a given ranking or short term payoff, but rather on where they feel the closest fit. The highest-regarded program with the most well-connected student and alumni network is useless if you don’t fit there and cannot effectively capitalize on that program or connect with its network.

    • Bill Gray says:

      The Darden students I have talked with did not apply to HBS because they didn’t think the school was a good fit.

      If someone was admitted to both Darden and Harvard, than they probably thought both programs were a good fit. In this case, I would tend to agree that most applicants would accept the HBS offer.

  3. dv says:

    i think the better route is passing all three levels of the cfa after undergrad. i know alot of mba programs follow 75% of the cfa material.

    if you passed the three exams you will be able to find an “mba type” job easy. at which point experience is most important.

  4. dv says:

    didnt realize you guys are all m&a buffs..

  5. Student says:

    Your point is well-taken. Averages are just that, averages. It’s too bad that schools aren’t more transparent with their numbers. Personally, as a student, I would like to see schools release full data sets of their placements, so potential applicants can make of them what they will.

  6. How are you guys doing this year? Have things picked up? I’m always impressed when people go get their MBA full time. One of my staff writers got his MBA part-time, and got promoted twice during the process.

    Salaries should pick up next year as the good times are back!


    Slicing Through Money’s Mysteries

  7. BTW, of course the average salary for Investment Banking jobs is 95K for both Darden and Harvard… 95K associate salary is INDUSTRY STANDARD! What matters is the bonus, which regularly accounts for 50-80% of total compensation. Come on guys, I know y’all can do better than this.


    • Bill Gray says:

      The MBA placement data includes signing bonus. I think the more interesting number would be bonus at the end of the first year. Let me know if you have seen this data anywhere.

      As for an associate’s first year performance, one starts to wonder how much is a factor of the MBA program vs. the individual. If the goal is to find the program with the hardest working individuals, maybe first year bonus would be a good number to investigate.

  8. Sokho says:

    Hi Bill, thanks for this results you’ve shares.
    I am actually looking for the Post MBA salary scales by country (esp focused on EU, Asia), by industry (lastest data).
    Does it happen that you have such data or know websites wheres I can get them for free?

    Thank you,

  9. andrew says:

    the point is that NO ONE would choose Darden over harvard. harvard has way smarter people, way better connections, and a way better location for finance and consulting…. there simply is no argument to go to darden over harvard. and if someone did choose that route, there would need to be VERY special reasons.

    even if i got a full ride to Darden, i would choose harvard.

    an MBA is a stamp, and the best stamp you can get is harvard

    • Lisa says:

      Interesting point, however incorrect it may be. I chose Darden over Harvard (Wharton, and Kellogg) and could not be any happier with my decision. The Darden program met every one of my criteria whereas I felt that HBS was very impersonal. I don’t feel the need to collect stamps…

    • Bill Gray says:

      I choose Darden over Harvard and so did all of my classmates. Even the ones who were rejected at Harvard still choose Darden over waiting a year to reapply at Harvard.

      I haven’t seen any data on which school has the smarter students, better connections, or better location. What I have seen is data that shows HBS and Darden grads get paid pretty much the same when you compare compensation at the industry level.

  10. Aubert says:

    Hi Bill, thanks for this results you've shar4s.
    I am actually looking for the Post MBA salary scales by country (esp focused on EU, Asia), by industry (lastest data).
    Does it happen that you have such data or know websites wheres I can get them for free?

    Thank you,

  11. Wes says:

    The after tax difference between 95 and 75 is not a big deal, especially when you break it down per paycheck. The MBA’s value is realized much later in life. Forward thinking people are beginning to turn down the schools in the Northeast, as living in the area and paying disproportional taxes is much less appealing these days.

  12. Cathy says:

    I think WHERE you try to work right after school is a big part of how much you can expect to earn. it also makes sense to plan a career trajectory for yourself, since a low starting salary can be completely justified if you can expect a promotion to a very well paid position after two or three years.

    try searching “banking salary” on a site where real people report their salaries to sort of judge what companies are paying best for what you want to do (and perhaps research the sort of schools they favor?)

  13. […] differences in industry preferences between schools.  (I’ve written more on this topic in my MBA starting salary […]