DATE POSTED 30. 05. 2011, By

Executive Compensation – Looking up in 2011

With another Chicago summer approaching, good news is in store for its financial executives. Like the outlook of warmer weather ahead, executives’ compensation is “warming up,” evidenced by fewer salary freezes and more pay increases compared to the past few years.

The Financial Executive Compensation Survey’s collection of data recently gathered recognizes an overall improvement in both companies’ and executives’ individual economic outlooks. In conducting the survey, Thomas Thompson, Jr., of the Federal Executives Research Foundation consulted with more than 1000 corporate executives – with about half of the executives being Chief Financial Officers – who chose to participate in the survey. The survey, released on May 19th, noted a .9% increase in base salary increases in both private and public companies, moving from 2.1% in 2010 to 3% in 2011.

Although private companies boasted an average $2,000 increase in base salary (moving from $204,800 to $206,800) over the past two years, public companies actually witnessed an average base salary decrease of $7,600 ($285,000 in 2010 to $277,400 in 2011) and an overall compensation decrease from $680,407 to $673,831. Thompson, Jr., noted that the decline with public companies was not significant in comparison with the positive economic outlook and may simply reflect the difference in executives participating in the survey from last year to this present year.

Another interesting area of data gathered by the survey involves the participation in both defined contribution and defined benefit plans. Although nearly 69% of executives did not participate in defined benefit plans – one common reason for not participating being the simple fact that such a plan was not offered – nearly 75% of surveyed executives participated in a defined contribution retirement plan with a matching employer contribution of 4%.

It is a great time to be renegotiating your executive compensation package. If you need advice or assistance regarding executive compensation, call an attorney knowledgeable in employee benefits and executive compensation.

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