The MBA Career Premium: UVA Darden in Top 5 for Lifetime Compensation Boost

In a new analysis, business education-focused online publication Poets & Quants has sought to find a definitive answer to the annual question, “What is the ROI of an MBA?”

Rather than conduct the ROI calculation most commonly presented — salary of the average student pre-MBA versus average starting salary post-MBA — Poets & Quants partnered with PayScale, which collects salary data from individuals through online pay comparison tools, to show the salary value an MBA delivers over graduates lifetimes.

The MBA–even from schools that lack global or national caché — delivers hefty seven-figure income over a post-MBA lifetime. MBA graduates from the top 50 business schools in the U.S., in fact, will pull down median cash compensation of $5.7 million after graduating and working for 35 years. That is a premium of $2.3 million over those with just an undergraduate degree.

The analysis certainly makes the case for the value of an MBA, generally, but most encouraging for University of Virginia Darden School of Business alumni, students and future students is the fact those with a Darden MBA rank among the Top 5 among all MBA programs for highest lifetime compensation.

So what’s the value of a Darden MBA? According to Poets & Quants, more than $8 million in median lifetime compensation — a $5 million premium over those with just an undergraduate degree.

And if you were lucky enough to earn your MBA from one of five schools–Harvard, Stanford, Berkeley, Dartmouth or Virginia–your estimated median pay would surpass $8 million over a 35-year period, according to Payscale. Because the average age of a Harvard Business School graduate is 29, that 35-year timeframe brings a person within a year of retirement age at 65.

And yet, as high as those numbers are, they are conservative. They do not include stock-based compensation of any kind, the cash value of retirements benefits, or other non-cash benefits, such as health care. The estimates developed by Payscale are for base salary, cash bonuses and profit sharing in today’s dollars over both a 35-year and 20-year period. They are not a projection of future earnings. But the estimates show that the MBA degree–despite all the second-guessing over its value–is one of the surest paths to a lucrative career.

The bottom line: Despite the high costs of the degree, the long-term returns on the education are not in dispute. “Education should be a dream machine through which talented students come from anywhere —and go anywhere,” says Scott Beardsley, dean of the University of Virginia’s Darden School of Business. “While it’s true that an MBA is a substantial investment, on a strictly dollars and cents metric, the salary data shows a clear and compelling return. For those in pursuit of a lifetime of meaningful, high-impact work, there is no better investment, in my opinion, than an investment in your own future through an MBA, which will open up a world of possibilities.”

Read the full story on Poets & Quants.