Still Rising: In 2020, MBA Salaries Just Kept Growing
Marc Ethier
12 min read
Class of 2020 MBAs from Stanford Graduate School of Business were once again the highest-paid among all top U.S. schools, with an average starting salary of nearly $160,000. Stanford photo
The overall employment picture for MBAs graduating from the top U.S. business schools in the coronavirus year of 2020 was perhaps best summed up by Abby Scott, assistant dean for career management and corporate partnerships at the Haas School of Business at the University of California-Berkeley. “I wouldn’t say that it was the toughest year,” Scott told Poets&Quants in November, “mostly because there was still a lot of optimism and it felt because this was kind of an economic shock rather than the true economic downturn that I think we’ve seen in previous recessions and years. It felt like things were going to be OK. And that proved to be true. Companies were able to invest in our grads, and in many cases, we didn’t have a lot of people’s full-time offers rescinded.”
Scott’s view was widely held across the top-25 MBA programs. In short, while job opportunities were somewhat diminished across the board — more on that in a future story — an MBA from one of these top programs continued to be a lucrative investment, even in a wild and unpredictable 2020.
Leading the way in starting base salary once again: Stanford Graduate School of Business, where graduating MBAs reported an average $159,544 to start their new jobs. Stanford was trailed by five schools that report only median salaries, and which are all tied at $150,000: the Wharton School at the University of Pennsylvania, Harvard Business School, the University of Chicago Booth School of Business, MIT Sloan School of Management, and Columbia Business School; and another median salary-reporting school in Northwestern University Kellogg School of Management, at $144,000. But in average salary, Stanford was followed by Dartmouth College Tuck School of Business ($143,867), NYU Stern School of Business ($143,858), the University of Virginia Darden School of Business ($139,945), and, rounding out the top five, Berkeley Haas ($139,122). Overall, two schools that report medians — Wharton and Columbia — saw no growth in MBA salary in 2020, but all 23 others saw increases, of a little or a lot. (See page 2 for the data.)
‘A TESTAMENT TO THEIR VALUE IN THE MARKETPLACE’
The highest average bonuses, meanwhile, were at NYU Stern ($37,982), followed by Cornell University Johnson Graduate School of Management ($36,391), the University of Washington Foster School of Business ($36,380), Duke University Fuqua School of Business ($35,032), and Georgetown University McDonough School of Business ($34,707). Stern was one of four schools to see average bonuses decline from 2019.
Among the 15 schools that report salary averages, the school with the highest rate of base salary growth was NYU Stern, which saw 6.3% growth. (Yale School of Management technically had the highest rate of growth of all 25 schools, as its median salary increased 7.7% to $140K from $130K.) Following Stern was Cornell Johnson (5.8%), Stanford (4.6%), USC Marshall School of Business (4.2%), and Dartmouth Tuck (3.5%). The lowest rate of growth was at Duke Fuqua, where salaries increased just $538, or 0.4%.
Five schools that report median data saw no growth in bonuses, but among the averages, the highest growth occurred at Washington Foster, which saw a 26.6% increase to $36,380 from $28,740. Also notable: Emory University’s Goizueta Business School saw bonuses jump 25.5% to $28,041 from $22,337. The smallest bonus increase? UNC Kenan-Flagler Business School’s MBAs reported an average $29,588 in 2020, up from $29,585 in 2019 — an increase of $3.
At Stanford, it was the sixth straight year in which the school set a new record for salaries, and the seventh consecutive year of improving on the benchmarks of the year before. All this despite the tribulations of an unprecedented year of disruption in graduate business education.
“What strikes me about the Class of 2020 is that despite the challenges in the global pandemic and with the economy, the job outcomes were strong,” Jamie Schein, assistant dean and director of the GSB’s Career Management Center, told Poets&Quants. “The mean and median salaries were record-breaking for the sixth consecutive year, and signing bonuses were up as well.”
So what’s the GSB’s secret? Nothing earth-shattering: just the prevailing value of the Stanford brand.
“Our graduates remained focused and determined, finding careers that allowed them to make a difference in the world around them, despite the turmoil in the economy and global health crisis,” Schein says. “The strong outcomes in this employment report are a testament to their value in the marketplace.”
SALARIES GREW, BUT THEY GREW AT A SLOWER PACE
MBA salaries continued to rise in 2020, but did they rise as swiftly as they had been? They did not. We took a look at 10 of the schools that report average salaries, breaking them out into a separate table (see above) to examine the rate of growth between 2018 and 2019 compared to the rate of salary growth between 2019 and 2020. We found that growth slowed at eight of the 10 schools, with the biggest drop-off at UC-Berkeley, where growth of 8% was followed by growth of just 0.9%. The total average salary growth for the 10 schools in the first period (2018-2019) was just under $7,000, or 5.3%; in the second, about $4,200, or 3.1%. That’s a differential of negative $2,773, or -2.2%.
The two schools where growth actually increased in 2020: Cornell Johnson, which grew 3.8% between 2018-2019 and 5.8% this year, and USC Marshall, which grew 4% and 4.2%, respectively.
Why not compare total compensation figures from the schools? Simply because for many schools, these calculations are not possible. To calculate a total compensation number, we need three components: base salary, sign-on bonus, and percentage of class reporting a bonus. We multiply the salary by 100, multiply the sign-on bonus by the percentage reporting it, add the two totals, then divide by 100 to come up with a number. But many schools do not report the bonus percentage; some, like Stanford, report that plus other compensation, which we are obliged to include in the total. A comparison between schools that do and do not include the latter number would be unfair. Same goes for median versus mean comparisons.
A THEME IN 2020: CALLING IN THE CAVALRY
Georgetown McDonough Associate Dean and Director of the MBA Career Center, Doreen Amorosa
Doreen Amorosa, associate dean for McDonough Career Services, attributes the overall positive outcomes of the 2020 employment cycle to help from the school’s alumni — and in many cases, the good fortune of having secured employment before March 2020, when coronavirus shut everything down. “Dean Paul Almeida asked our McDonough Alumni to support MBA students still seeking jobs and internships,” Amorosa told P&Q in November. “In the following weeks, over 200 of them stepped up with job and internship postings, virtual consulting projects, assistance with technical training and mentorship.
“Second, 75% of our graduates went into industries where they either had an opportunity to convert their summer internships or accept a new full-time offer before the pandemic began. And from the internship perspective, 50% of them went into consulting or finance functions. These opportunities were largely secured prior to the pandemic.
“Third, having been a former corporate recruiter, I understand the intricacies of ‘just-in-time recruiting.’ Each year, we kick off our just-in-time recruiting process in January. Students refresh their target company lists, and immediately re-energize their networking efforts. By doing this, they are ready to apply for roles and internships in early March. To the extent that hiring was still going on in April, they were already well into the recruitment cycle and this served them well.”
Help from alumni was a theme last year. At NYU Stern, Beth Briggs, associate dean of career services, said her school kept up its base pay figures while also ensuring that 100% of the Class of 2021 secured summer work by calling on its famously robust alumni network. The school leaned into a rebrand announced in 2019 that included the launch of SternWorks, an initiative that connects MBAs with small businesses and nonprofits that need their help.
“Throughout the recent challenges,” Briggs wrote in the introduction to the school’s jobs report, “our two-year, full-time MBA students drew upon their intellectual strength and emotional intelligence to demonstrate resilience and empathy for one another, and all of the Stern community, as we collectively navigated an unexpected and a changed world.
“Our partnership with employers and alumni was key to student success as we deepened existing connections and created new opportunities. These relationships resulted in all first-year students who were seeking a summer internship securing one and a large percentage of our graduating second-year students finding full-time roles.”
Adds Jonathan Levin, Stanford’s dean: “If there was one constant this year, it was change. In times like these, you want to have a network of supporters who can be a safeguard against potential negative shocks. Thanks to our generous and close-knit community of alumni who provided that wonderful safety net, we sourced around 200 summer opportunities and some 100 full-time positions as well.”
See the next page for a table of MBA salary & bonus data for all 25 of the top-ranked U.S. B-schools.
NYU Stern Class of 2020 MBAs reported the highest average bonuses, at nearly $38K — which was actually down slightly from last year. File photo
BRINGING OUT THE BEST IN THE BEST
Mark Brostoff
At USC Marshall, where Mark Brostoff serves as the assistant dean and director of Graduate Career Services at USC Marshall, the impact of the pandemic was ultimately seen as not as bad as it could have been.
“For full-time employment, the only trend that I saw early in April was some hesitancy with start dates,” said Brostoff, who has been . “We did not see a great number of offers being rescinded. That was really good news — the number of rescinded offers was very low, in fact almost negligible. And if we did have a rescinded offer, the good news was the student was somewhat positioned to follow up in other areas. So anyone who was affected by rescinded offers ended up finding alternative of full-time work experience. So that was really good.”
Brostoff echoed others’ refrains on alumni stepping up, particularly on internships.
“Basically I took a strategy out of my playbook during the financial crisis in ’09 and ’10,” he says. “In mid-March, immediately, when we realized that this was not going to be a short-term virtual work from home, but we were in for a long haul — as soon as I saw two or three companies completely canceled their internships, we began to reach out to the Trojan network. The dean reached out, I reached out, the alumni development folks reached out and we started to identify really high-level, MBA-level projects, or what I call summer work experience. The clubs did the same.
“In our backyard, for example, here in L.A., the entertainment industry was obviously hit pretty hard for on-site work because the studios were all closed, but work had to be done. It was just that they were not filming. There were no studios open. So we began to identify these projects. Some had stipends, some were paid, and some were unpaid. But as I talked with recruiters in April about whether it would have a negative impact if the student had on their resume, not a traditional internship — one of those 12-week internships for X number of dollars — a meaningful summer experience instead. And 100% of them said that would be not only a good thing but a very impressive thing. It would show that your Marshall students did not sit back and simply say, ‘Oh, look what Covid-19 did for me. Boohoo, I don’t have a summer internship.’”
As Berkeley Haas’ Abby Scott says, it was a tough year. But tough times bring out the best in tough people.
“I’m very proud of our Class of 2020,” Scott said. “I think it was a really tough year. The community came together and the students worked really hard and my team worked really hard. And so I think it was a pleasure to see what I think are exciting results.”
‘OVERALL WE SEE COMPANIES RECOGNIZING THE VALUE OF THE MBA’
It wasn’t just alumni stepping up that got the MBA Class of 2020 out the door and into their new careers, largely successfully and for more money than their predecessors. It was also a lot of hard work by schools’ career management teams.
Stephen Pidgeon, executive director of career services at the Tuck School at Dartmouth College, told P&Q in November that the school’s success — Dartmouth’s average MBA base salary grew 3.5% in 2020, and its signing bonuses grew nearly 10% — can be attributed not only to the contributions of a robust network of alumni, but to the dedicated work of the careers team, as well. “In the middle of a global health crisis, we anticipated that recruiting might be more difficult this year,” Pigeon said. “The mechanics of recruiting remain much the same remotely, but we were mindful at the onset about the number of opportunities that might be available. In the end, a common theme emerged: organizations prioritizing collaborative, team-oriented leaders — a bill that Tuck students fit perfectly.
“I was pleased to see where we ended up with offers and acceptances. When I think back to the spring, when the pandemic was sweeping across the world and the economic situation was very uncertain, I did have a moment of concern, but I think our class of 2020 ended up doing very well. Salary numbers are up considerably, and I’m very pleased for our graduating students that they were able to achieve such high salaries. Some of this is driven by an increase in the percentage of students going into consulting, where companies are very competitive with each other to land the best talent, but overall we see companies recognizing the value of the MBA.”
