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GSB average salaries rise, but starting salaries fall

Graduates of the Stanford Graduate School of Business (GSB) have enjoyed consistently increasing average base salaries for the past three years, according to GSB reports. During the same time period, however, the range of starting salaries has decreased.

The average base salary for GSB graduates rose to about $129,000 from around $118,000 between the 2009-10 and 2011-12 academic years. For 2009-10, the range of salaries varied between $330,000 and $40,000, while during the 2011-2012 academic year the upper limit fall to $260,000 and the lower limit to $20,000.

Pulin Sanghvi MBA ’97, assistant dean and director of the GSB’s Career Management Center, attributed the range drop to the business school’s ability to prepare students for a variety of fields.

“The statistical variation reflects different choices students made and who ended up reporting in on the optional surveys,” Sanghvi said.

While schools such as the Columbia Business School tend to send the majority of their students into finance and consulting, Stanford has historically sought to cultivate a variety of skills applicable across a range of fields.

For example, 13 percent of the GSB’s Class of 2012 started or explored entrepreneurial ventures, compared to 7 percent of graduates at the Harvard Business School.

“The value of an MBA for a traditional career path at a firm has decreased in recent years,” said Nicholas Flanders, an incoming student at the GSB and a former McKinsey & Company analyst.

“However, the value of Stanford’s MBA program for entrepreneurship has bucked that trend, so these statistics have not affected my decision to attend,” he added.

Startup salaries are completely excluded from the GSB’s statistics, creating a nominal drag. According to Sanghvi, the GSB doesn’t include startup salaries because it is governed by widely practiced compensation reporting guidelines. Those guidelines largely exclude startup compensation on the grounds that equity-based compensation can vary vastly in valuation.

In addition to emphasizing the variety of industries entered by GSB graduates, Sanghvi also cited the GSB’s class size range of 360-390 students as a reason for the salary range drop.

“Dealing with such a small pool, there is always variation at the top,” Sanghvi said.

The declining range of salaries is also hardly unique to Stanford, and has affected peer institutions like the Wharton School of the University of Pennsylvania. The Wharton School saw its top salary range drop from a $350,000 upper limit in 2010 to a $250,000 upper limit in 2012.

Even so, GSB graduates’ average base salary of roughly $129,000 remains above that of peer institutions, with the Wharton School and the Harvard Business School averaging around $120,000. The US News and World Report currently ranks the GSB as the nation’s joint top business school, tied with Harvard.