If you have not gone through a year without receiving a raise or sacrificing your once standard annual bonus, then you probably know someone who has. Companies all over the country have adopted these measures to maintain costs until the economy recovers. Perhaps that time is finally growing near. The 11th annual Compensation and Entrepreneurship study, released in conjunction with J. Robert Scoot, Ernst and Young, and the Harvard Business School, reported C-suite executives at private tech companies received a 3.3% year-over-year salary increase in 2010, while C-level executives in life sciences companies received a 4.2% salary increase over the same period.“While salaries did increase for executives at both technology and life sciences firms in 2010, average increases are lower year-over-year than we have historically found. In fact, the average annual increase in salary over the past ten years has been five percent,” said Aaron Lapat, Managing Director at J. Robert Scott. “Although the rate of growth for these salaries has not returned to pre-recession levels, it is substantially higher this year than last, when we saw technology executives on average receive no raise at all.” (Image courtesy: http://bit.ly/dup3gw)
In fact, for 2009, the survey revealed that non-founder, C-suite executives at tech companies received only 56% of their target bonuses. Non-founder CEOs at these firms received just $53,000 on average, or nearly 15% less than the $61,000 they averaged in 2008. Life sciences executives were better off, having received 67% of their 2009 target bonuses on average, surpassing the 44% they received in 2008.
“The survey results indicate that we’re in a transitional period, where a mix of economic factors makes it challenging for companies to implement effective compensation strategies,” said Bryan Pearce, Ernst & Young’s Americas Director. “It’s important that company boards assess their current compensation structures so they strike the right balance between maintaining capital efficiency and retaining the top talent needed to seize emerging strategic opportunities.”
Surveys like this convey the trend of things improving, but not as fast as desirable. Ideally, of course, we would whiteness substantial salary increases, large enough to off-set years of salary freezes and sub-par bonuses. Improvement cannot be rushed, though. For now, executives are just going to have to be satisfied that salaries are at least back to moving in the right direction.
[Sources: http://bit.ly/bFYjKf, http://bit.ly/cNwvBo]
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