Here's a nice dose of reality - article on top mba grads' career earnings

Bloomberg Businessweek: http://www.businessweek.com/bschools/content/may2…

Some headlines:

  • On average, MBAs from the top 45 B-schools will make around $2.5 million in base pay and bonuses over the course of a 20-year career. (that's $125,000 a year)

  • MBA grads from Harvard earn the most-a median of $3,867,903-over those 20 years. (that's $193,395 a year)

  • The numbers suffer from some inherent limitations-they don't include stock or options.

...It's hard enough to get into HBS, it''s gotta be even harder to be the HBS graduate that beats the statistics! This article states that the average HBS graduate makes less than $200,000 a year! That doesn't sound like much at all to me. I mean, the average age of someone starting at HBS is 27...so we're talking about 29-49 here. How big of a difference do those stocks and/or options make!?

Region

Comments (12)

 
Jun 6, 2010 - 2:11pm

"The numbers suffer from some inherent limitations-they don't include stock or options."

Stock and options can make up a significant portion of total compensation (especially at the senior level), so that's why the number might be lower than expected...

 
Jun 6, 2010 - 2:18pm

Furthermore, the top 45 is much too large a sample because students beyond the top 15(-ish) aren't really getting into high finance jobs anyway. Even within the top 15 or so MBA programs, not everyone goes into finance, so the universe you're describing is MUCH larger than the pretty specific set of MBA students we normally discuss on this site.

"If you can count your money, you don't have a billion dollars." - J. Paul Getty
 
Jun 6, 2010 - 4:43pm

$125K from a top 45 school average, excluding stock options, that isn't bad. Lets face it, if you get an MBA from a 20-45 school you are probably doing it PT and still working. Your pay and promotion moves at a normal pace outside of the world of high finance. Not factoring in options is pretty huge since that is a large chunk as you move up the ladder.

Anyone shitting on 125-200K a year has zero idea what it is to actually make money or work for a living. Do realize that if you are making 125K at Kraft you are probably working 50-60 hours a week and have a normal life outside of work. You are also probably not working in NYC where you get raped in taxes and living expenses. Lets suppose you make 125K working for Heinz in Pittsburgh. Lets also assume you are single since adding in a wife would mean we should add her salary.

You could live in the Pennsylvanian, the nicest property in downtown Pittsburgh. You could bank probably 2K a month, plus max out on your 401(k). You would have a month plus vacation which you could actually use so no burn out and you could drive at least one very nice vehicle (range, BMW, whatever). Plus has spending cash. Pretty nice life if you ask me.

Yes, not for everyone, not saying people should strive for more. I would want more than 125K also, but lets not shit on making over 6 figures outside of NYC. Hopefully you don't marry a loser and you can double that yearly income.

 
Jun 6, 2010 - 7:48pm

How much do we think that these stocks and options are accounting for, on average, for say...the graduates of the top 10 or so b-schools (i.e., those involved in investment banking/finance and consulting)?

1/2 the total salary?

1/4?

less?

more?

 
Jun 6, 2010 - 10:24pm

Let's forget the stock/option compensation idea for a second here. There's something much more fundamental you need to think about here: what is the source of the data, and how complete is the sample?

As far as I'm aware, these #s come from PayScale.com. What kind of HBS graduate do you think is posting his compensation information on PayScale.com when they are in their 40s or 50s? (especially think about the people you personally know from that generation).

My conclusion: the #s are probably preetty accurate for schools outside of the top 20. The #s for schools within the top 20 most likely are a fairer representation of the bottom 20% of the MBA class.

 
Jun 7, 2010 - 7:04am

confusion about median and mean.... the way Business Week looks at it is absolutely wrong.

Median will not show you the outliers. But for MBAs compensation, its all about the outliers that make massive amounts of money.

Example: 100K, 200K and 2700K : Median is 200K, Average is 1000K

And obvisouly, excluding stock options (and probably things like perks and pensions and other compensation including non-exec board member seats) doesn't make any sense. The higher your salary is, the less likely is it to be cash.

Start Discussion

Popular Content See all

Girlfriend vs PE
+98PEby Investment Analyst in Private Equity - Growth Equity">Investment Analyst in PE - Growth
I’ll never take WSO for granted again
+57OFFby Principal in Venture Capital">Principal in VC
I'm tired man
+39IBby Intern in Corporate Finance">Intern in CorpFin
First year analyst, still feel incompetent and like I haven’t learned anything
+31IBby 1st Year Analyst in Investment Banking - Mergers and Acquisitions">Analyst 1 in IB-M&A
Friends in IB are chilling hard, how can I get this?
+20IBby 3rd+ Year Associate in Private Equity - LBOs">Associate 3 in PE - LBOs
Q&A: Associate at MM Private Equity fund
+18PEby 1st Year Associate in Private Equity - LBOs">Associate 1 in PE - LBOs

Total Avg Compensation

January 2021 Private Equity

  • Principal (6) $693
  • Director/MD (15) $627
  • Vice President (58) $366
  • 3rd+ Year Associate (60) $272
  • 2nd Year Associate (116) $246
  • 1st Year Associate (249) $224
  • 3rd+ Year Analyst (23) $162
  • 2nd Year Analyst (56) $139
  • 1st Year Analyst (163) $119
  • Intern/Summer Associate (18) $71
  • Intern/Summer Analyst (178) $59

Leaderboard See all

1
LonLonMilk's picture
LonLonMilk
98.5
2
Jamoldo's picture
Jamoldo
98.4
3
Secyh62's picture
Secyh62
98.3
4
CompBanker's picture
CompBanker
97.9
5
redever's picture
redever
97.7
6
frgna's picture
frgna
97.6
7
bolo up's picture
bolo up
97.5
8
Addinator's picture
Addinator
97.5
9
Edifice's picture
Edifice
97.5
10
NuckFuts's picture
NuckFuts
97.5