MBAs At Microsoft, Bain & Google Top Pay Sweepstakes

$54.06.

For many that amount doesn’t mean much. For freshly minted MBAs, it should mean more. $54.06 is the average hourly wage a recently graduated MBA makes, according to a new study of pay by TransparentMBA.

The startup, founded by Chicago Booth School of Business students, is the Glassdoor for MBAs, tracking pay and lifestyle trends of MBA interns and graduates. The hourly wage data, based on reports from more than 700 MBAs at more than 80 schools across the world, tracks compensation of graduates in roles fewer than two positions after their MBA.

While $54.06 serves as a baseline, it doesn’t scratch the surface of the story. For instance, of the employers with more than 10 MBAs to report compensation amounts, none pays more per hour than Microsoft. Despite a relatively low total compensation average of $158,463, the 19 Microsoft MBAs to report data also reported working a not-too-demanding average of 45 hours a week, making the hourly rate come out to a $67.72 average. Next up was Bain & Company, where recently graduated MBAs can expect to make about $62.19 per hour. Meanwhile, at Google MBAs pulled down $61.33 per hour.

Near the bottom for companies with sufficient data points, according to TransparentMBA, are Amazon, McKinsey, and Bank of America Merrill Lynch, where MBAs make $45.15, $45.45, and $48.14, respectively. Interestingly, eight newly graduated MBAs at Fidelity Investments reported a total compensation average of $230,950 at 52 hours a week for a whopping $85.96 an hour average. Arguably more intriguing, at the bottom was five MBAs at Apple who reported making an average of $137,000 but worked 70 hours a week for an effective hourly wage of just $37.64.

PRIVATE EQUITY, VENTURE CAPITAL ARE MOST LUCRATIVE INDUSTRIES FOR RECENTLY GRADUATED MBAs

Job function-wise, nothing is as lucrative as private equity. Recently graduated MBAs can expect to make a remarkable $85.98 an hour in the field. Working just 50 hours a week and making upward of $223,000 makes it an attractive, albeit elusive, job function. “A lot of MBAs are trying to break into it and you pretty much have to have an investment banking or private equity background if you want to come into private equity,” explains Kevin Marvinac, TransparentMBA co-founder and chief operating officer.

Not surprisingly, another increasingly attractive and lucrative job function for MBAs is venture capital. Also averaging just 50 hours a week, MBAs in venture capital are making $70.14 an hour, the TransparentMBA data reveals. Up next is investment management, where MBAs take in $70.05 an hour while working 58 hours a week. Marvinac believes venture capital is increasing in popularity because of the potential upside and the relatively light workloads of 45 hours a week for associates — the most common position for newbie MBAs. Toward the cellar are MBAs heading into human resources, where $37.80 an hour is the typical wage. Project managers and MBAs who land jobs in information technology don’t fare much better at $40.45 and $42.35 an hour, respectively.

In terms of total compensation, private equity again tops the list with an average of $223,538. Investment management is not far off, where recently graduated MBAs report an average of $209,447. “The compensation in some areas are pretty astronomical,” Marvinac points out, noting MBAs heading into investment management and hedge fund management.

INVESTMENT BANKING: ‘GREAT COMPENSATION PACKAGES, BUT A TON OF HOURS’

Of course, MBAs headed into i-banking have little cause for worry. Freshly minted investment bankers make more than $195,000 on average. As Poets&Quants previously reported, they also work two traditional work weeks in one. Indeed, the nearly $200,000 doesn’t seem as attractive considering investment bankers report working an average of 79 hours a week — far more than any other industry. In fact, the next most worked industry is human resources, with an average of 16 hours a week less at 63 total hours.

“The data obviously shows what most people think and assume, which is that investment bankers coming out of MBA programs work a ton of hours,” says Marvinac, noting the tendency to use investment banking as a stepping stone to another position or career. “Great compensation packages, but a ton of hours,” he adds.

The original TransparentMBA team. Pictured from left to right are Jeremy Selbst, Mitch Kirby, Alyssa Jaffee and Kevin Marvinac. Courtesy photo

MOST LUCRATIVE INDUSTRY? REAL ESTATE

Marvinac and TransparentMBA also sliced the data within industries, adding such areas as real estate, mutual hedge fund management, and “chemicals-plastics,” among others. Industry-wise, MBAs entering real estate top the hourly wage list. At $87.46, real estate MBAs make an average upward of $11 more than the next highest industry. Venture capital and private equity are next in line with $76.31 and $71.74, respectively. Jobs at mutual funds and hedge funds show up fourth at $71.37.

Toward the bottom are the nonprofit, hospitality, and arts and media industries, where MBAs make $33.33, $34.97, and $42.25, respectively. Popular industries for MBAs such as tech, consulting, and investment banking scatter the middle of the list. Tech, for instance, has an effective hourly wage of $58.31. However, e-commerce and Internet falls further down the list at $49.24. Meanwhile, MBAs entering consulting can plan on $53.40 an hour, and investment bankers are at $47.66.

Once again, at 79 hours a week, investment banking is the most overworked industry. Surprisingly, MBAs entering environmental and natural resources careers are looking at almost equal i-banking work hours —with much less compensation. MBAs in that industry report clocking 75 hours a week for annual income of $170,000, an effective hourly wage of $43.59. The industry that works the least, according to the data, is “recreation-leisure-sports,” with a typical 40-hour workweek.

Marvinac says job function and industry is separated when users enter data, and the “basic framework” for both categories is based on MBA Career Services & Employer Alliance standards. Differences stem from “fringe” employees, Marvinac says. An example is someone who works in the venture capital division of the Pritzker Group, he says. Technically, they work in private equity, but their job function falls into venture capital. Based on that example, Marvin says, the job function category tends to be slightly more helpful.

‘WORK-LIFE INTEGRATION, NOT WORK-LIFE BALANCE’

While Marvinac says the data is not yet robust enough to glean major career trends, it does pass the “gut-check” on anecdotal evidence. One of those anecdotes, he says, is that work-life balance may well be something of a myth among the MBA millennial crowd. “Anecdotally, I think this term ‘work-life balance’ isn’t the correct term anymore,” he says. “I think for a lot of these folks going to top MBA programs, it’s ‘work-life integration.'”

A discernible trend from the data is that more students are now making career decisions based on work-life integration and flexibility. “Students are making decisions based on work-life integration versus work-life balance, specifically, with this trend towards flexibility,” Marvinac reasons. To be sure, tech firms and startups have nailed the flexibility and work-life integration, which Marvinac describes as an increasingly blurred line between work and life outside of work. Investment banks (generally) have not. The investment banks are aware that a reputation for long hours might be damaging their recruiting pipelines.

“I think our generation is more okay with those blurred lines than our parents or their parents’ generations,” he says, noting TransparentMBA’s job satisfaction and flexibility data. “And I think this data backs that up. At tech firms, there seems to be a good satisfaction score because of that flexibility.”

Still, interest in working on Wall Street remains strong for MBAs. “People going into investment banking know what they are getting into,” Marvinac begins, noting he has never worked as an investment banker. “This is very well vetted out to them before taking these jobs. And, I think, a lot of them are using it as a stepping stone or knowing as you proceed in your career towards senior positions, the hours drop dramatically and the strategy and tactical execution and number crunching increases.”

This data was provided by TransparentMBA, a free career data resource for MBAs, alumni, and prospective students. Sign up today and access their 220,000+ data points across 2,000+ companies.
businessman cheer on top of money stairs with sunlight cloudscape