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MBA Salary Guide
It's not a myth: having an MBA is strongly associated with earning higher than average salaries. On average, a person graduating with an MBA can expect a 119 percent increase in salary within three years, says Marco De Novellis, senior editor for Graduate Management Admission Council's BusinessBecause networking site and GMAC Media.
People in management positions make the highest wages of all major occupations. Chief executives may earn a median salary of $179,520 per year, according to the U.S. Bureau of Labor Statistics (BLS).
Here are some examples of jobs that often recommend or require an MBA:
|Career||Median Annual Salary|
|Human Resources Managers||$126,230|
|Accountants and Auditors||$77,250|
|Financial and Investment Analysts||$91,580|
|Computer and Information Systems Managers||$159,010|
Salary Differences Between Bachelor's and Master's
According to the Graduate Management Admission Council's most recent survey of business recruiters, the average MBA makes about 77 percent more a year than the average person with a bachelor's degree. The GMAC report concludes that over the lifetime of your career, you can earn $3 million more with an MBA than with a bachelor's degree.
In addition to base salaries, many executives earn annual bonuses and other perks, such as stock options or profit sharing.
"Your earning potential is much higher with an MBA," says Michael Biarnes, a manager in the New Products and Business Development division of The Janssen Pharmaceutical Companies of Johnson & Johnson. Biarnes adds that a number of other factors will affect how much you can make.
What Factors Influence Your Salary?
In any career, an individual's salary may be substantially higher or lower than the average. Several factors besides education level influence the salary of a person with an MBA.
"It depends on the type of company, the location, and the position," explains Marco De Novellis. The ranking of your school may also be a factor, he points out, with the top 20 ranking business schools generally securing positions in the companies that pay the highest salaries.
Your MBA salary will depend on the type of company, the location, and the position.
The earning potential of an MBA is often measured in what's referred to as "return on investment," or ROI. In other words, compare the amount of money you'll invest to earn your MBA to the salary increase you hope for or the goals you hope to achieve, De Novellis explains. (Don't discount the amount of time you'll spend earning your MBA as a factor, as you may choose to work part time or not at all while going to school.) The majority of graduates will find a favorable ROI, De Novellis says.
Do Companies Pay Bonuses for MBAs?
Some companies do pay bonuses for MBAs. In fact, graduates of top-tier business schools may be offered sign-on bonuses by recruiters. For most workers, however, bonuses are paid after employment begins.