Stanford has released its 2021 MBA employment report, the last top school to do so
As we’ve seen in the release of employment reports from top-25 programs throughout fall and winter, the pandemic whirlwind has failed to cause long-term damage to job prospects for MBAs from elite business schools. If you want further evidence, take it from the top program: Stanford Graduate School of Business.
In 2020, newly graduated Stanford MBAs landed the highest starting compensation for MBAs anywhere in the world, reporting new records in the averages of the three pay categories: starting base salary, sign-on bonus, and expected performance bonus. Today (January 19), Stanford released its MBA Class of 2021 employment report showing that after two cycles of coronavirus, the world’s top B-school has largely stayed the course, with base salaries and performance bonuses growing once again, even as signing bonuses slipped. Placement rates rebounded in a big way.
Though they were small gains, Stanford GSB again set school records for average starting base salary ($161,831, up from $159,544) and average expected performance bonus ($78,373, up slightly from $78,299); the former stat has grown to new heights each of the last seven years. With sign-on bonuses ($29,148, down from $32,551) reported by 52% of grads and performance bonuses by 70%, average total MBA compensation at Stanford grew to $231,849 — up just $112 from last year’s mark of $231,737, but a new record nonetheless (and for the eighth consecutive year). And consider: Stanford MBAs’ compensation has increased 7.3% since 2019 and nearly 11% in three years.
CLASS OF 2021 'LEARNED HOW TO DEAL WITH AMBIGUITY & UNCERTAINTY'
Jamie Schein, assistant dean and director of the GSB's Career Management Center
Stanford MBAs' median salary also climbed in 2021, to $158K from $156K; overall 2021 was the seventh straight year that Stanford set new school salary records and the eighth consecutive year of total compensation growth for the B-school that Poets&Quants has ranked No. 1 for three years running.
Using median numbers, Stanford MBAs eclipsed compensation of $200K this year with salaries of $158,400, signing bonuses of $30,000 (reported by 52% of grads), and performance bonuses of $37,750 (reported by 70% of grads), for a total of $200,425. That's up 3.1% from $194,365 in 2020.
Whether you use mean or median data, Stanford continues to outpace its peers among the elite MBA programs. Harvard's Class of 2021 reported a median total compensation package of $189,850; Chicago Booth, $178,450; and Northwestern Kellogg, $175,800. Wharton, which does not report "other" bonus information, reported a 2021 median salary of $155K.
“More than other classes, the Class of 2021 learned how to deal with ambiguity and uncertainty, and to be adaptable and resilient,” Dean Jonathan Levin says in a statement accompanying the release of the employment report. “We are thrilled to see how they are applying what they have learned, going on to incredible roles in numerous industries.”
On the whole, Stanford graduated the highest-paid MBAs of all time in 2021 — but one student, in particular, was even better remunerated than the rest. Someone in finance (but not PE or VC or hedge funds) reported an expected performance bonus of $1,000,000. See the story here.
JOB PLACEMENT RATES REBOUND
The pandemic had a clear and measurable negative effect on Stanford in one key area: job placement rates, which dipped from 94% with job offers three months after graduation in 2019 to 91% in 2020, while acceptances dropped from 88% to 85%. But 2021 erased those losses as both stats jumped significantly: Within three months of graduation, 96% of Stanford's Class of 2021 had received a job offer, and 91% had accepted.
"I was really pleased that our numbers came out as they did," Jamie Schein, assistant dean and director of Stanford's Career Management Center, tells Poets&Quants. "We sort of had a hunch that it would look similar to 2019, and indeed it did. So for our students, the 2020 report really was where we felt the impact of the pandemic, and from a job opportunities perspective, it's nice to see that the Class of 2021 had opportunities that they could really make meaningful choices from, and they were able to land great jobs.
"So it's really a testament to them, their persistence, and to the fact that businesses have figured out how to work in a hybrid environment and onboard people in a way that they can feel like part of a team."
Like their peers from other elite B-schools, Stanford graduates pursue roles in industries around the world. The industries attracting the highest percentages of MBA Class of 2021 graduates were finance (33%), technology (29%), consulting (18%), which were barely changed from last year, as well as healthcare (5%), and media/entertainment (4%).
"We're always the law of small numbers, where a few students changing course can make our numbers look like they vary, but it's pretty darn steady," Schein says.
Strategy and business operations roles were a big draw for members of the Class of 2021. Twenty percent of graduates accepted consulting jobs by function, while 26% went into business operations and management positions.
Finance MBAs unsurprisingly reported the highest median salaries, at $175K, led by those in venture capital ($177,500). Consulting MBAs reported median salaries of $165K, and tech MBAs, $150K.
FELLOWSHIPS BOOST ENTREPRENEURS IN TIME OF NEED
Shortly after the pandemic hit in March 2020, a pair of GSB alumni Roelof Botha and Huifen Chan created the Botha-Chan Innovation Fellowship to support student entrepreneurs through the difficult summer of 2020. The fellowship has been extended for the next three summers; it and others, such as the Social Innovation Fellowship, helped Stanford maintain its level of entrepreneurship in both pandemic classes at the highest rates in school history.
In total, 18% of the Class of 2021 graduates started a new venture — same as last year — and are pursuing it full-time post-graduation; that's the highest level of startup creators in the MBA ranks that the school has yet reached. Nearly half, 49%, started their venture in the U.S. West, with another 27% starting up elsewhere in the U.S. and 24% outside the country. Of those starting a new venture:
7% were in the energy sector;
17% were in the finance sector;
37% were in the technology sector; and
8% were in healthcare.
'GRIT & RESILIENCE'
Another huge difference in 2021: the return of in-person internships.
“The pandemic has made the MBA experiences for the classes of 2021 and 2022 very different from what they imagined when they arrived at Stanford. I am thrilled that the rebounding economy has provided them with opportunities in traditional MBA roles as well as in new and disruptive organizations,” says Professor Paul Oyer, senior associate dean for academic affairs, in a statement accompanying the new employment report. “Our 2021 graduates are well-positioned to make an impact in their post-GSB careers.”
In a way, the dearth of in-person internships in 2020 benefited the Class of 2021, Schein says.
“The Class of 2021 weathered the initial shock of the global pandemic as they pursued their summer internships in 2020, demonstrating grit and resilience,” she says. “Those students then graduated into a robust job market where they found opportunities aligned with their values and where they could make an impact. Outcomes for the class are in line with previous years, and show a return to pre-pandemic offer timing with strong salaries.”
In past years, most graduating Stanford MBAs have remained on the West Coast. Covid-19 restrictions have only reinforced graduates' desire to avoid relocation and other travel. In 2020, a year defined by travel restrictions, 60% of Stanford MBAs stayed in the West, making a median $155,000 — lowest of all grads who stayed in North America, and lower than the continental median of $160,000. The 20% who relocated to the Northeast — or at least took jobs with companies based there, for which they perhaps onboarded remotely — made the most, with a median pay of $170K.
In 2021, 56% of Stanford MBAs stayed on the West Coast, perhaps indicating a thawing of pandemic-related relocation reluctance, at median salaries of $160K — equal to the continental median. Meanwhile, 22% took jobs in the Northeast at a median of $158K.
In 2020, 89% of Stanford grads stayed in North America, 6% went to Asia, and 3% went to Europe. Another 1% each went to Africa and Latin America. This year, 93% stayed in North America, with only 3% moving to Europe and 1% to Asia.
"I feel good about what we said in the report, that this was a unique experience for these students to go through business school during Covid," Jamie Schein says. "And I think the outcomes really show our students' focus, our students' commitments to making a difference in their post-GSB jobs, and really their resilience in taking the cards that were dealt and coming through with some great outcomes for them.
"I'm just really happy that our students have landed in a place that they feel good about, and that makes sense for their career goals."
AND CHECK OUT OUR COVERAGE OF THE JOB PROSPECTS FOR OTHER SCHOOLS' MBA CLASSES OF 2021:
The post Stanford GSB Graduated The Highest-Paid MBAs Of All Time In 2021 appeared first on Poets&Quants.