How much do top business school professors get paid?

Highest paid business school professorsA couple of years ago, US media raised a storm over the pay of a business school professor of Indian origin. Kannan Ramaswamy, who taught global strategy at Arizona’s Thunderbird School of Global Management, received a compensation package of $700,000. Some journalists and academic experts wrote that Thunderbird, which had been on the decline for some time, was already $4 million in the red. They said that even Thunderbird President Angel Cabrera was paid only $584,789 and that the school was grossly overpaying Ramaswamy, who, they said, was “little known” outside the school, “not widely quoted in the media,” and “not recognized as an expert in his field.”

But Ramaswamy was not the only professor at Thunderbird with a mindboggling salary. Indeed, he was only one among the top 10 professors at the school were paid a total of $4.3 million. Many readers took Ramaswamy’s critics to task, explaining how b-schools decided on their faculty salaries and why they thought Ramaswamy was a topnotch teacher.

In any case, a b-school professor who takes home more than half a million is not such a rare bird in the US. Many professors enjoy an equal or a higher pay at Columbia, Cornell, Yale, Harvard, Duke, UC Berkeley, UT Austin, and UPenn.

As Dean of University of Pennsylvania’s Wharton School, Thomas Robertson’s compensation package was nearly $772,000. In an article in late 2015, the Daily Pennsylvanian pointed out that this was higher than the salary of UPenn’s Dean of Arts and Sciences, $523,000, and that of business deans at schools such as Harvard. Nitin Nohria, Dean of Harvard Business School, received $697,000, about $75,000 less than the remuneration that Robertson, now Professor of Marketing at Wharton, had received as Dean.
 

The top 10 highest paid professors in USA

“The Best Schools” website has listed the 10 highest paid college professors in the US. The top two positions go to medical school professors David N. Silvers ($4.33 million) and Zev Rosenwaks ($3.3 million), but the rest of the list is dominated by b-school professors.

Third on the list is Dean Takahashi, Adjunct Professor in the Practice of Finance at Yale School of Management. Takahashi, who is also Yale’s Senior Director of Investments, oversees the university’s endowment, pension, and charitable trust assets of $17 billion. His annual salary: $2.6 million.

Fourth on the Best Schools list is William E. Fruhan Jr., Professor Emeritus at Harvard Business School, who has served as director of 15 corporations and authored books and scholarly articles, at $1.19 million. At fifth is Dan J. Laughhunn ($1.03 million), Professor Emeritus at Duke Fuqua, an expert in decision-making science and specialist in the study of risk preference of managers. The sixth place goes to Andrew M. Isaacs ($709,000), who directs management of technology programs at Berkeley Haas.

In the seventh position is Kannan Ramaswamy, and in the eighth, Andrew Inkpen ($566,000), a specialist in joint ventures, strategic alliances, management of knowledge, and organizational learning in the automotive, telecommunications, energy industries, at Thunderbird. The 10th place goes to Graeme Rankin, Associate Professor of Accounting, at Thunderbird, with $493,000 (Steven Weinberg, Professor of Physics and Astronomy, University of Texas, Austin, is at ninth with $536,000).

Other top professors drawing high salaries include Daniel Oppenheimer (UCLA Anderson, psychology), Neil Malhotra (Stanford GSB, political economy), Cait Lamberton (Pittsburgh Katz, marketing),  Victoria Brescoll (Yale SOM, organizational behavior), Keisha Cutright (UPenn Wharton, marketing), Luis Diestre (IE Business School, Spain; strategy), Panos Patatoukas (Berkeley Haas, accounting), Cynthia Rudin (MIT Sloan, statistics), Adam Alter (NYT Stern, marketing), and Michael Christian (UNC Kenan Flagler, organizational behavior).
 

Other sources of income for professors

Many business professors with doctorates take up consulting positions with industries, participate in international teaching assignments, publish articles and books, and speak at conferences. Salary is, therefore, hardly their only source of income. Indeed, for at least a few professors, the fee from non-teaching assignments surpasses their salary.

Poets & Quants reports that professors from MIT, Northwestern, or Harvard charge a fee of $100,000 for a single speech, while professors from lesser known institutions command $20,000-$40,000. A 2014 P&Q article says that the three highest-paid speakers from academia at that time were all Harvard Business School professors — Michael Porter, author of the Porter’s Five Forces concept ($150,000 a speech), Clayton Christensen, who coined the term “disruptive innovation” ($100,000), and John Kotter (professor of leadership and change, $85,000).

Vijay Govindarajan of Dartmouth College’s Tuck School of Business was paid $55,000 for each of his talks on innovation and strategy. [Read our interview with Vijay Govindrajan]

An interest among companies in the “military model” to groom leaders catapulted the then Yale School of Management professor Brig.-Gen. (retired) Thomas Kolditz to celebrity-speaker status with a fee of $20,000. Douglas Conant, as chairman of the Kellogg Executive Leadership Institute, earned $45,000 per appearance for his insights on leadership, and Peter Senge of MIT Sloan $40,000 for his knowledge of organizational learning.

Among star women-speakers was Harvard’s Rosabeth Moss Kanter, who was paid $40,000, and Columbia Business School Professor Rita McGrath.

Other celebrity speakers included Joseph Stiglitz of Columbia Business School ($80,000), Nouriel Roubini of NYU Stern School of Business ($75,000), W. Chan Kim of INSEAD ($75,000), Gary Hamel of London Business School ($50,000), and Marvin Zonis of the University of Chicago’s Booth School of Business ($45,000).
 

Median salaries for business school professors

A look at salaries of full-time business faculty members in the US as reported by the Association to Advance College Schools of Business (AACSB) provides perspective on celebrity professors’ salaries.

According to figures on the AACSB website for 2014-15, the latest available on the website, full-time professors teaching finance (including banking) received the highest annual average salary of $183,000 among all b-school full-time professors from all disciplines (accounting; CIS/MIS; economics/managerial economics; finance, including banking; management; and marketing). New hires for finance in the full-time professor category also recorded the highest average salary among all new hires in the same category, of $231,000.

The highest average salary globally (excluding the US) among full-time professors was highest among full-time professors teaching finance, at $141,000. The average among new hires (full-time professors) globally was highest among new hires teaching finance, at $175,000.

Full-time associate professors of finance (including banking) received the highest average salary of $143,000 among all full-time associate professors in the US in 2014-15. The average salary of new hires for finance (full-time associate professors) at $186,000 was the highest among new hires in the category across all disciplines. However, globally, excluding the US, full-time associate professors of accounting, not finance, received the highest average salary of $115,000. Among new hires, the average salary was the highest among associate professors of management, at $128,000.

However, according to a 2015-16 survey by College and University Professional Association for Human Resources, among tenured/tenure-track professors, those teaching law recorded the highest median salary of $146,000 (associate professors $109,000; assistant professors $96,000), those teaching business, marketing, and management the second highest at $130,000 (associate professors $110,000; assistant professors $106,000), and those teaching engineering slightly lower at $129,000 (associate professors $97,000; assistant professors $84,000).
 

Business deans’ salaries

According to a P&Q article from 2015, data from 20 b-schools collected by the website showed that the median salary of deans was $432,000. Dean of the University of Michigan’s Ross School of Business Alison Davis-Blake was the highest paid dean of a public university b-school at that time—$597,000. Maryam Alavi, Dean of the Georgia Institute of Technology Scheller College of Business, drew $550,000.

The article says the Dean of University of Berkeley Haas School of Business Richard Lyon’s salary of $424,000 was low, considering Haas’s better ranking and the cost of living in Berkeley.

According to P&Q, a comparison of deans’ salaries showed that “there was no rhyme or reason” in how these compensations were fixed (see the P&Q link below giving salaries of deans, the ranking of their schools, and the cost of living in the schools’ locations). But earnings of b-school professors depend on factors such as education, experience, and geographic location.
 

Qualifications required for teaching jobs in business schools

A Master’s degree in business is usually what it takes to secure a teaching position in a business school that is not expected to lead to tenure. A doctoral degree is required for a tenure-track position at four-year colleges and may not be required in two-year colleges.

A candidate for tenure may have to teach as instructor, assistant professor, and associate professor in a university for many years before finally being recognized as a full professor, and then he or she may choose to work in an administrative position such as dean or departmental chair or president.

 
Resources: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 | Image soruce: Inside Higher Ed


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13 Comments

  1. Spandan says:

    Hi I am spandan
    Graduate in ECE engineering with CGPA of 8.1.
    I have experience of 1 year in developmental filed- Policy analysis in Niti Aayog and Fellow as teach for india.
    I want to pursue MIS/STEM courses in the us.
    Please can someone suggest what more i need to add to my resume or Can i get a college with this much experience.
    Thanks

  2. radhika says:

    Sir,
    I am a second year engineering student. They say, the earlier, the better. So I decided to focus on further studies right from now. Sir, my college offers very good placement with nice packages. Plus, I have maintained top cgpa. Because of this, I am confused whether to pick an offer from the table or to go for MS without taking the placement. Please help.

  3. Brojendra says:

    i have 8.5 years of experience in a leading software company and I am a B.Tech by qualification. I intend to pursue one year mba in India in Data Analytics or IT consulting. Will my high experience be a problem in getting an offer from campus after the course completion? Please elaborate me with the pros and cons of taking up MBA at my experience level.

  4. srijana budha (rawat) says:

    hello sir ,
    i’m srijana i did my pgdm in marketing and Hr, 2014-2016 batch from delhi. which is equivalent to MBA i just want to go USA for further study like business management . but i’m marride and i have my 6 months daughter so what will be the procedure for this help me .
    thanks.

    • J LIM says:

      Nothing is equivalent to a good American MBA. It is characteristically American and sells very well in the US market by design. I don’t know for India.

  5. VijayaMahangtesh says:

    I am 42 years old. I Completed M.Tech in CSE in the year 2013. I served as Assistant Professor in an Engineering College for 5 years. Now i want to Join Software Industry, so which course i need to start with so that i could get the job as earliest

    • J LIM says:

      If they admit you. You may want to try this program.
      https://warrington.ufl.edu/post-doctoral-bridge/
      Otherwise take Phd courses as directed in the curriculum and apply for concurrent admissions.
      A MTech will qualify you to be a masters level lecturer or clinical professor and not an assistant professor tenure track. The pay difference is 30 – 60k compared to USD 150k on average. See my other postings.

  6. saniya islam says:

    Hi,

    I have completed my engineering in IT and MBA in Business Analytics and Finance.
    I aim at pursuing MS in Business Analytics .

    Please let me know which are the best colleges for GRE score 310-315. Also, let me know the scholarship and total tuition fee of the colleges.

    • J LIM says:

      You can get 400 – 600 on your verbal scores and explain in letter that English is not your first language and provide proof of qualifying TOEFL/TSE/TWE scores.
      For quant, most programs expect perfect 800 or close as you are competing with people who have first Phds in physics, math or economics or psychology for Phd business.

  7. Apoorva Dethe says:

    Hi Sameer,
    I have 3.5 years of work experience in SAP in Capgemini. I have also got job in Deloitte, so till next March I will be completing 4 years of experience. I wish to pursue one year MBA program further. Is two year recommended or one?

    • J LIM says:

      Two year is recommended if you want to change field or learn a complete masters course of business, especially if you do not have a bachelor of business administration.
      One year is redundant if you plan to stay in your current position for long. At minimum, it should consist of one management course, one marketing course, one finance course and one accounting course. Business law or quantitative methods of business or statistics is very useful to have. So is an internship if the program you are wanting to attend offers one. If you want to be a manager, you might want to take one managerial economics or human resource management course. If you want to go international, you might want to take an international business or international marketing course. If you plan to stay with Deloitte, be sure to try to take an advanced accounting or Phd accounting course if you think you can manage,
      Alternatively, Deloitte also does international transfer pricing which is very well paying. For the mid to top level analyst, called associates or specialist. These courses help you make alot of money as bonuses or incentive pay if you are good at what you do. To do this properly, the best preparation would be derivatives capital asset model Phd finance course. It is very quantitative and this course is known for failing Phd physics and mathematics students so be warned. To get a taste of it, Google Black–Scholes pricing derivative model.
      You either are instinctively able to understand it once explained once or read in a book or you will have trouble with it.

  8. Sameer Kamat says:

    @Spandan: Your current experience doesn’t seem to have any overlap with your choice of masters degree. Make sure you aren’t getting into something just because it’s in demand.

    @Radhika: I’d vote for a job. Read this: https://www.mbacrystalball.com/blog/2015/06/01/mba-or-ms-after-btech-be-engineering/

    @Brojendra: It could work in your favour if you are aiming for jobs in the same industry. A big career change would be more challenging.

    @srijana: The application process remains the same as it is for any other applicant, except that you’d need to justify the second MBA. Read this for some inspiration: https://www.mbacrystalball.com/blog/2015/12/18/mba-for-indian-mom-with-kids/

    @saniya: Check this out: http://www.mbacrystalball.com/masters-degree/data-science-analytics

    @Apoorva: With your experience, a 2 year MBA would be good since it allows you more time to learn and experiment. Plus there’s the internship opportunity.

  9. Jeremy M Lim says:

    Hi.. I am from marketing… these are the posted salaries for finance (page 93) and marketing (page 97). These are from the general population university non-appropriated non confidential funding source provided by the state of Florida and the us department of education. https://drive.google.com/file/d/1_yvi7qwwkrgugl5porqjfdnpshamivig/view?usp=sharing
    As you can see… finance has top pay positions of eminent scholar research chaired professor of about USD 450,000. Marketing has eminent scholar chaired professor pay positions of USD 380,000+. This is separate from consulting work that you are encouraged to do and build industry contacts.
    Business school deans are known to make more than university professors. The first that comes to mind is a business school dean at the University of Michigan in 2002 whose name is Brian Joseph White who made USD 1.5 million in 2002.
    That being said. University of Michigan post the salaries for all staff on umsalary.info and a quick search will reveal that some industry renowned guest lecturers (i.e. if warren buffet came to teach can make upwards of USD 6 million dollars). These are not listed as faculty that are governed by the AACSB regulations for full time or part time counted faculty that are subject to accreditation standards. They do not have to publish 2 + papers per five years or be renowned in their field as a practitioner guru. They can make anywhere from USD 28000 is the lowest i believe for a lecturer/visiting distinguished professor or clinical professor title whichever is available for useage for someone whose job is to teach and has the minimum of a masters of business or equivalent and they teach very many courses around 3 courses to 5 courses a semester and make about USD 3000 – USD 8000 per course.
    There also are extremely successful business visiting professors who want to try out teaching a course in business schools who are more than qualified (i.e. Sam Walton, Warren Buffet, Donald J Trump, etc.) And these can make their comparable salary if they are deemed to be a publicity and selling point for the business school which is cash rich and the cash cow for most schools and not the cost center.
    Business schools are only as good as their placement. You will often see AACSB required postings of job placement statistics “at graduation”, 3 months out of graduation and 6 months out of graduation and the top 30 schools usually have statistics of around 88.7 percent , 95 percent, 97 percent.
    This does not mean that if you are currently unemployed, that you can go to a MBA program for 2 years and expect to make USD 100,000+. A lot of people would like that as do the business schools as they can sell more degrees but that is not the case. We keep our starting or resuming salary high by first screening the people we take. If you have the requisite two to five years of business experience at a supervisory or analyst level with salaries of USD 50,000 – USD 100,000k. You are very likely to be admitted because your gradual increment will be consistent with our target. Even if you already know all that we are about to teach you. The least we offer you is a rubber stamp endorsement that you have the degree required for the next progression in your career which is a masters of business administration. The second advantage we offer you is networking skills and an opportunity to be known to the future colleagues and leaders of your industry via in class time and also via multiple opportunities to present in business settings and at clubs, honor societies, etc. We also offer you the ability to recruit without attracting the department human resource attention or that of your immediate supervisor where you can trade for higher paying jobs without termination. Again, we also offer you the ability to re-finance or accumulate start up savings or investment capital by having your company sponsor your MBA and you also qualify for a federal loan or scholarship that you can choose to spend or save (buy a new car, clothing for your job, etc.). This may not seem like a lot but if gives you the needed three month buffer living expenses to attempt new jobs and new things or start a new business. The people who own the wing zone fast food company started out of the University of Florida as undergraduates and have not turned into a regional fast food chain which is quite impressive.
    Again, it does not mean that we will not recruit fresh undergraduates especially if your career or personal track is in line with our goals. For instance, if you own the patent rights to a certain product or computer program that we view will enable you to have a salary of about USD 100,000 at graduation even if you have below average GMAT scores and no work experience. If you father is Donald J Trump and you stand to inherit the trump towers hotel, i view that as being in line with the career profile of making at least USD 100,000 at the completion of your studies. If you have an inheritance and will not be working, that would probably not qualify you. As indicated, the placement record is what differentiates us from other non-professional school or discipline. We attempt to train you with relevant and marketable skill sets that would place very easily. Also, we offer internship programs while you are a student and taking course credit for directed internship thru out network of companies hiring interns so you can gain career experience without risking looking like you were unemployed or lazy on your resume.
    That being said, being a business professor is a lot of work and in my opinion not ever tenurable as we have very strict industry accreditation standards that dictate that we have to be viewed as a “scholar” by means of constant publication every five years or a practitioner by means of “engaging the business community or practicing in it”. So there is really no tenure as the school’s faculty have to be 90 percent accredited at any one time and the 10 percent is for providing those that do not qualify with notice and for filing in temp positions while we replace them.
    After all, what is tenure if you lose your accreditation and are no longer qualified to run your business model?
    Also, a lot of departments envy the business pay scale and would like to call themselves business departments such as sports marketing or management or other departments. The job of the business dean is to keep non business model consistent departments out and not impact the result of the placement or the business model or goals. That can be extremely stressful and short lived if you step on the wrong toes.
    For instance, though our job is not to produce pilots or international travel abroad studies programs or soldiers.. You may see some business departments paring up with these other departments to offer the students the opportunity to travel and network internationally or to manage their career placement risk and objectives by being duly able to engage private or non private employers such as the finance or real estate or the defense industry (army rotc/air force rotc) sectors as a fall back since these do provide the possibility of appointment as a logistics/accountant or other types of management or human resource department with decent overall salary structure of USD 80,000+ within three to five years of employment depending on prior service.
    Our salary survey guide for newly minted business PhDs in the multiple fields are available here for the various years. I do not know of the top of my head for finance, accounting or management but the survey for marketing is here: https://www.ama.org/who-went-where-survey/ you can click here for current marketing phd/professor job postings: http://marketingphdjobs.org/ the CV of current candidates are also linked to in the previous link.
    Again these results swing from year to year quite greatly as it seems schools also test market their postings and budget in some lee way. This is very dependent on your kind of research.. Behavioral/psychology, mathematics/non-linear programming, econometrics/statistics, management/decision science/strategy, business law/marketing history, logistics/supply chain. International or retailing. Some departments may have all or none of the above.
    When the USA economy is doing well and jobs are anticipated to rise or fall (increasing enrollment) research for fields like behavioral or retailing may be more valued and schools may focus less on hiring international or logistics. Very top schools hire in the mathematical/non linear programming and game theory areas and their research is very specialized and at least as sophisticated as what you can be expected to engage in if you stayed in your home department. This is true also of advanced psychology science or decision judgement making type research which publishes in journal of consumer research, psychological science, etc.
    For rankings, go to UT Dallas top 100 business schools and sort by the top four journals of the field you are interested in.
    I hope this helps.

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