According to the most recent survey by TopMBA.com, companies report that the average MBA salary went above $82,000 in 2004, up more than 9% from 2003, the Wall Street Journal reported. That total compensation figure matches record pay levels during the peak of the dot-com boom and follows a long period of relative stagnation since 2001.
Not only are compensation packages more generous, but executives at major firms on Wall Street and elsewhere say they are bringing on more new hires and returning to campuses this fall with more full-time offers to meet their growing business needs, the Journal reported. Goldman Sachs Group Inc., for example, said it plans to hire roughly 200 MBAs from the class of 2005, a 30% increase from the year before. Bain & Co., a Boston consulting firm, is hiring a “record” level of MBAs, David Sanderson, head of global recruiting, told the Journal.
Among the MBAs enjoying the biggest bonanza are those with a finance or management consulting focus, according to the survey. Average salaries in finance increased 21% to $98,477 in 2004 from $81,144 in 2003, while average salaries for management consultants jumped 16% to $86,233 during the same period, according to the survey.
“The consulting firms have led the charge,” with base salaries rising about 10%, Al Cotrone, director of career development at the University of Michigan’s Ross School of Business, told the Journal. He said general management firms have also raised average salaries to $90,000 and above, after holding steady at about $85,000.
At Dartmouth’s Tuck School of Business, the average consulting salary for an MBA graduate peaked at $110,000 in 2001, then fell to $100,000 in 2002, Richard McNulty, director of the career-development office, told the newspaper. Today, graduates are seeing consulting salaries up to $120,000, with sign-on bonuses ranging up to $30,000.
Another good sign: Some banks are guaranteeing bonuses for a graduate’s first year of employment, said Julie Morton, associate dean of MBA career services at the University of Chicago Graduate School of Business. An MBA’s first year of employment is typically a short one, since many start working in the middle of the calendar year. During the economic downturn, not many firms were willing to guarantee those hires a year-end bonus.
Meanwhile, sign-on bonuses are running closer to $25,000 to $30,000 for the current MBA class, up from about $20,000 last year, Morton noted.