Benefits and Compensation

Survey Says … Executive Compensation Is Up

The BlueSteps Executive Compensation Report, recently released by the Association of Executive Search Consultants (AESC), reveals that almost half (44%) of executives at the CEO/president level experienced a rise in total compensation in the last fiscal year.

Of the CEOs who received an increase in total compensation, 38% received 16% or higher growth in the last fiscal year, with 45.6% of respondents at this level earning annual base salaries in the $251,000 to $400,000 bracket.

Pay for Performance Is Working, Report Concludes

The significant spread between those who received the greatest increase in total compensation and those who remained flat or decreased is likely an indicator, the report concludes, that pay for performance is working in terms of both cash compensation and long-term incentives.

The last fiscal year was also positive for executives at the director and EVP/SVP/VP levels, as two-thirds of both groups received an increase in total compensation (66% and 65%, respectively).


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The AESC and BlueSteps conducted the survey from October 2014 to November 2014 and gathered 907 responses from senior-level executives in manufacturing/industrial, technology/telecoms, healthcare/life sciences, consumer/retail, and other sectors worldwide. Additional findings of the report include:

  • A significant percentage (45.6%) of CEOs made base salaries of $251,000 to $400,000, while the rest of the C-suite (64.7%) earned $151,000 to $300,000—about $100,000 less.
  • The gender pay gap began to develop at the $250,000 base salary level and above, because fewer women are represented in C-suite positions.
  • Long-term incentives were an important motivating factor to most executives, with 60.5% stating that they believe long-term incentives have motivated them to stay at their current company longer, until these incentives mature.

Karen Greenbaum, AESC president and CEO, says: “This survey shows that total compensation is on the rise for most executives. It is interesting to note that executive search revenues grew by 8.6% year-on-year during quarter three, indicating increased demand for top level talent, according to the AESC’s latest ‘State of the Industry’ statistics.

“There is no doubt that, as businesses are now in growth mode, top talent is highly valued and sought after. For many organizations, executive search is the solution to their talent concerns and the profession is responding.”


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Gender Gap Increases at Top Levels

“This report also suggests that the gender pay gap isn’t noticeable until the $250K+ level, where fewer women are represented in the data. Organizations risk losing top talent to their competition if they don’t clearly demonstrate that they value diversity and inclusion at all levels of the organization,” Greenbaum says.

Among survey respondents, the average male base salary was $232,561, while the average female base salary was $222,944. There was also a disparity in bonuses between the genders, with the average male bonus at $75,468 and the average female bonus at $54,318.

The full report is available for download here.

Tomorrow, we’ll take a look at a checklist for drafting executives’ contracts—including compensation, benefits, and more.

Source links:

http://compensation.blr.com/Compensation-news/Compensation/Compensation-Administration/AESC-Executive-Comp-Report/

https://www.bluesteps.com/Client/Documents/2014-AESC-BlueSteps-Executive-Compensation-Report-Compressed.pdf