MBA Salary and Bonuses

The average salary for MBA graduates have been increased by 27% in last eight years. In 2004, survey says that MBA salaries have been raised by over 9% as compared to 2003 which was over $82,000. MBA recruiters and MBA placement agencies predicted more salary growth in year 2005 as service sector was in continuous rebound state. The salary rise in year 2004 and year 2005 reflected high level of buoyancy amongst MBA recruiters resulting into hunting top MBA talents. Global economic recession in the only black cloud giving shocks to the horizon of MBA graduates after year 2008.

The starting salary of the MBA graduate plays important role in deciding the entire structure that he could expect to avail throughout their professional career. The main reason being, a MBA has specialized skills like critically thinking, analyze and solve the complex problems, efficiently use the latest technology, communicate clearly and logically, hard work etc.

According to the GMAC report, an average salary for fresh MBA graduate is around $80,300, which keeps on increasing every year.

Following is a table for starting salaries for MBA, employed in the year 2006 as per the report of GMAC:

MBA Salary in various regions:

According to the previous survey made by MBA Recruiters and MBA placement agencies globally, Western Europe and U.S. have reported similar average salary in which Eastern Europe and Latin America lag behind.

The last years MBA Salary figures show convergence across Europe, Asia and U.S. The main cause can be the effects of increasing globalization of MBA recruiting companies and the standardization of recruitment practices followed by them. In this standardization recruitment process, many global companies coordinate their recruitment process globally with an intention not to drive top candidates away from their key geographies just because of salary differential. This standardization practice is mainly observed in consulting firms, investment banking and pharmaceutical companies.

Average salaries in more developed countries of Asia like Hong Kong, Malaysia and Singapore are over $75,000. While the countries like India and China hire MBA in the salary between $20-40,000 which is pulling down the overall salary figures in whole Asia.

Latin America hires MBA at the salary of $48,500 which is approximate 40% lower than other countries of U.S. However, the cost of living of almost all cities of Latin America is 50%-60% lower than New York.

Education of Business Administration is still new to Central Europe having no established market in this field.

MBA Salaries reported regionwise in Year 2004 (Figures in US$)

Bonuses

The increase in the salaries of the employee is not only the benefit for MBA, but additional bonuses are also likely to be given. The bonus is ensuring to those candidates who have been working in the same firm for 2 to 5 years. The bonus is generally given for helping for payback tuition and for the performance done at the end of the year bonus.

Same like increase in MBA Salary in year 2004, bonuses for year 2004 have increased substantially as compare to 2003. Banking sector reported the largest earning bonus while energy sector offer bonus which is slightly lesser than that of banking sector. The consultancy sector comes next to energy sector in terms of giving bonus. The most reduced bonus figures were reported in manufacturing and high-tech sector.

Full compensation reported in Year 2004 in various industry (Figures in US$)

However, the compensation offered to you as MBA graduate depends on various factors like the country of education, chosen school/college, chosen industry, score card etc. But the candidates should compare their offers with that of the person working in the same profession, same post, same years of experiences etc. so that they get a clear idea regarding competitive offer and communicate this standards with the recruiters. No MBA graduate can make out their financial planning based on the bonus performance bonus offered to an individual or team or to a company as it remains a means for an employer for introducing variable compensations and ensuring that they do not make any financial promises which they cannot able to complete.