What Columbia B-School MBAs Made This Year - Poets&Quants

One of many photos posted to Instagram last week by celebrating Columbia Business School MBA students

In 2017, employers have been kind to MBA graduates– particularly at M7 programs. Stanford MBAs broke the $180K average pay mark, while Harvard starting pay has climbed by nearly $10K since 2015. Pay inched up at Wharton Chicago Booth, and Northwestern Kellogg too. However, one top program has been immune to this growth trend in recent years. Despite being located in the “very center of business,” this school is increasingly at risk of being left behind.

That’s one theme that emerges from Columbia Business School’s 2017 Employment Report. Over the past three graduating classes, CBS has seemingly flatlined, posting impressive numbers yet failing to take the proverbial next step after its post-recession jump. Think of CBS as a fund, one that outperforms its indices on the surface yet leaves the impression that it could be so much more.

HIGH PAY BUT A LOW GROWTH PROPOSITION

Looking at the Class of 2017, it is hard to determine whether the glass is half full or half empty. On one hand, the class pulled down total median pay of $146,550. In context, that is seventh-best among MBA programs that have reported graduating class data. What’s more, it tops peer programs like Chicago Booth and Northwestern Kellogg by $5K or more. However, such news is undercut by one statistic: 2017 CBS grads earned $7,500 less than their NYU Stern counterparts.

Pay & Employment Remains Strong At A Wide Range Of MBA Programs

School	Job Offers	Total Median Pay	Major Employers
Chicago (Booth)	97%	$141,500	McKinsey, Amazon, BCG, Bain, Accenture, Morgan Stanley
UPenn (Wharton)	97%	$149,300	McKinsey, BCG, Amazon, Bain, Goldman Sachs
Michigan (Ross)	97%	$147,845*	Amazon, McKinsey, Deloitte, BCG, Microsoft
Duke (Fuqua)	96%	$145,500	Deloitte, McKinsey, Amazon, BCG, Accenture
Minnesota (Carlson)	96%	$122,400	3M, Deloitte, Ecolab, Land O’Lakes, Microsoft
Harvard Business School	95%	$154,750*	NA
Dartmouth (Tuck)	95%	$146,250	McKinsey, Bain, Amazon, BCG, Microsoft
Northwestern (Kellogg)	94%	$140,350	McKinsey, BCG, Amazon, Bain, Microsoft
New York (Stern)	94%	$154,147*	Amazon, Deloitte, JP Morgan, McKinsey, Credit Suisse
Emory (Goizueta)	94%	$144,580*	E&Y, Amazon, PwC, Deloitte, Citigroup, Georgia Pacific
Columbia	93%	$146,550*	McKinsey, BCG, Bain, Amazon, Deloitte
Virginia (Darden)	93%	$149,750	Microsoft, BCG, McKinsey, Accenture, Amazon
Vanderbilt (Owen)	93%	$130,750	Amazon, Deloitte, Wells Fargo, Microsoft, North Highland
Stanford GSB	92%	$165,250*	NA
Indiana (Kelley)	92%	$134,113*	E&Y, Microsoft, P&G, Amazon, Deloitte
Cambridge (Judge)	92%	$130,218	Amazon, McKinsey, Google, Uber, BCG

* Reflects starting salary, sign-on bonus and other guaranteed compensation, adjusted for the percentage of students receiving bonuses and other comp. The rest of the numbers include only salary and sign-on bonus because the school does not report other guaranteed compensation. Job offers data is for three months after graduation.

Indeed, CBS is seemingly at a standstill in the MBA employment market. For the third consecutive year, graduates earned a base salary of $125,000. For the sixth time in eight years, median signing bonuses hovered around $25,000 – with the outlying years coming in 2012 and 2013 to the tune of $30,000. The percentage of 2017 CBS graduates landing a bonus – 65.7% – was also the third-lowest over those same eight years. In addition, just 21.5% of the class earned other guaranteed compensation, such as tuition reimbursement and stock options. Not surprisingly, this compensation totaled a median $25,000 – the same figure for the last three years.

A comparison with Stern illustrates that CBS’ impasse is hardly cyclical. In 2014, Stern MBAs snagged median compensation packages of $137,582 – $2,100 less than Columbia. That starting pay has since jumped to $154,147 over the past four classes – a $16,500 increase. However, Columbia grads experienced just a $6,900 bump during that same period – despite sharing the same market. This is particularly noticeable over the past three graduating classes, where CBS graduate pay slogged along to the pace of $145,500, $147,000, and $146,550.

GRADS THRILLED WITH THEIR OUTCOMES

These are enviable pay numbers, no doubt, but also numbers that reflect attainable room for improvement. That said, Columbia is hardly alone in hitting the pay wall. From 2013-2015, for example, total median compensation at Wharton see-sawed from $145,475-$146,450 – and has since risen $6,500 over the past two classes. Harvard too suffered a two year spell where total median pay languished…only to enjoy a $13,500 resurgence over the next three graduating classes.

The 2017 Class also didn’t fare as well on the high and low ends of compensation. The lowest reported base stood at $40,000, which was $20,000 than the lowest base from the previous graduating class. This year’s highest reported base came in at $250,000 and stemmed from private equity. It was, however, a noticeable drop-off from last year’s $325,000 high base. In better news, one spring graduate reeled in a $165,000 bonus – more than double the $75,000 high from the 2016 class. In addition, a 2017 grad managed to negotiate a $250,000 package of “Other Compensation” goodies.

Despite sluggish returns compared to previous years, the Class of 2017 was pretty happy with their employment results. The school reports that 94% gave their job satisfaction either a 4 or a 5 on a 5-point scale (where zero was the lowest mark). Overall, 73% of employed graduates found jobs through “school-facilitated opportunities,” with over half deriving from on-campus interviews and internships. In addition, 93.2% of the Class received job offers within three months of graduation, with another 89.3% accepting their offers. Not to mention, 28 students had started their own companies by graduation.

An artist’s rendering of a student area in the upcoming Columbia Business School complex

TECH BOOMING AS FINANCE CONTINUES TO CONTRACT

A decade ago, over 55% of a graduating CBS class would move into banking. In fact, CBS was tagged with a reputation for being a Wall Street training ground. While finance remains the school’s biggest draw, it has greatly diversified in recent years. For one, consulting now runs neck-and-neck with finance, with the latter holding the edge by a slim 34.4%-to-33.1% margin. In context, the margin was 50.3%-to-22.3% just six years ago. In fact, consulting firms accounted for four-of-the-five largest consumers of CBS talent in 2017 (and five-of-five the year before).

INSERT FINANCE TABLE

So what happened to banking? The decline can mostly be traced back to investment banking. In the Class of 2011 – those students who were applying to business school right at the height of the financial collapse – 50.3% entered the financial sector after graduation. What’s more, a quarter of the class joined investment banking firms. Fast forward to now and finance has dropped by 20 points, with finance representing 16.9% of this drop. The investment management side also took a head-on hit, with its proportion of graduating classes cut in half. Whether correlation or causality, banks have also scaled back hiring at CBS over the past six years, including Goldman Sachs (18-to-8), Citi (16-to-7), Credit Suisse (12-to-4), Barclays (11-to-2), and UBS (8-to-2).

A second change in CBS employment stems from media and technology firms, which recruited 15.6% of the 2017 class. Amazon seemingly camped out in Morningside Heights, snapped up 23 grads – more hires than it made with the 2015 and 2016 classes combined. IBM also hauled off a record number of grads this year, while Google remained among CBS’ top ten employers. Considering the growth of New York City’s tech sector, it is quite conceivable that the share of CBS graduates entering the industry could top 20%.

CONSULTING FIRMS RAMP UP CBS HIRING

Overall, CBS graduates entering strategic management earned the most in 2017. The starting median base was $147,000, with bases ranging from $65,000 to $211,500. Not surprisingly, bankers fared well, with base pay for investment banking, private equity, venture capital, and fund management grossing $125,000-$132,500. They were also matched by graduates in the healthcare sector, who reported $125,850 in median starting pay. Real Estate ($120,000), Media and Entertainment ($115,000-$120,000), Manufacturing ($105,000), and Education and Non-Profits ($80,000) lagged further behind.

That doesn’t mean you need to be an aspiring banker or real estate mogul to hit big.  One graduate from Internet Services and eCommerce claimed a $211,000 starting salary, for example Strangely, CBS doesn’t break down sign-on bonus medians by industry, yet closely tracks “Other Compensation.” As expected, banking professionals cleaned up in this category with the medians for hedge fund management and private equity topping out at $100,000 and $72,500 respectively.

McKinsey has traditionally hired the most CBS grads – and the Class of 2017 was no different. This year, 55 graduates – or 7% of the class – joined McKinsey. Think of McKinsey as one satisfied customer, as the firm has hired 50 or more Columbia graduates for five consecutive years. By the numbers, BCG obviously counts itself among CBS’ fans after quadrupling the number of hires there over the past six years, topping out at 36 in 2017. At the same time, Amazon, Bain, and Deloitte have more than doubled their CBS hires over that same period – a testament to the appeal of such jobs…and CBS grads as well.

To read the full report, click here.

DON’T MISS: MEET COLUMBIA BUSINESS SCHOOL’S MBA CLASS OF 2019

 

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