Is compensation for executive managers and top operational leaders of fund companies improving? Not necessarily, but at least they're happier with what they're getting.
Among 177 executives surveyed by Money Management Executive in its third annual compensation survey, 82% reported that they find at least some level of satisfaction with their compensation. This is a significant boost from last year, where only 56% of those surveyed reported satisfaction with their earnings capacity last year, and also an improvement from 77% in 2011.
But fewer executives satisfied with their total compensation felt that they were being rewarded for their own results and effort. Only 7% of executives this year felt they were being adequately compensated for the work they put in to the job, compared with the still low figure of 10% last year.
Those who felt they were being compensated fairly for their position comprised the highest percentage of executives satisfied with their compensation, or 31%, followed by the 18% who felt their compensation was competitive with executives with the same job at other companies.
Other reasons for satisfaction included strong bonuses, long-term incentives, discounted stock purchase programs, stock options, profit sharing, and low deductibles on health insurance.
The greatest dissatisfaction, meanwhile, came from employees who felt their compensation was lower than industry standards. That comparison accounted for 41% of dissatisfied employees. A comparison to others in the same position accounted for 31% of the dissatisfied.
Base salaries seem to have remained relatively flat between 2012 and 2013, with the number of executives receiving under $100,000 slightly down overall, and those receiving salaries between $201,000 and $400,000 slightly up among mid-size and large companies.
Pay appears to be expanding at the low and middle of compensation ranges, but not at the high end.
The percentage of executives earning $401,000 or more has remained flat at 3%.
But executives earning between $201,000 and $400,000 reached 30% in 2013, versus 18% in 2009. Meanwhile, 66% of executives reported they were earning $200,000 and less, compared with 79% four years ago.
As for bonuses, most respondents expected those to shrink slightly, from last year and from four years ago. Slightly more respondents said they expected to earn bonuses equal to 50% or less of their base pay in 2013, specifically 67% of respondents versus 64% last year. Also, 35% of respondents expected to earn bonuses equal to 51% or more of their base pay, versus 36% who received that in 2012, and 37% in 2009.
Most bonuses in the low range, meaning equal to 20% or less of base pay, stayed the same. Interestingly, the percentage of respondents who said they were earning bonuses equal to 91% or more of their salaries increased, to 22% from 20%.
Most respondents reported getting more basic forms of added compensation than last year.
A significant number of respondents reported that they receive matching funding from their employers for money placed into 401(k) retirement plans, a jump up to 78% from 65% last year. Mid-sized and large companies did much better with matching contributions, with nearly 90% of companies of those companies offering matches compared with only 58% among small companies.
Meanwhile, 43% of respondents expected to receive payments from defined contribution plans, up from 28% last year. Those receiving pension payments? Up to 22% compared with 3% last year.
Hoorah for vacationers, where 66% of respondents said they received four or more weeks of vacation, compared with 63% last year. Longer vacation time seemed to display a direct correlation to company size, with the smallest companies receiving the least vacation time and the largest receiving the most.
A fewer number of respondents said they shared in the profits of the firms they worked for, or 34% compared with 33% last year.
Meanwhile, 32% of respondents said they received deferred compensation of some sort, compared with only 5% last year, and 35% received restricted stock grants compared with 7% last year.
A good 11% said they had no deductible health insurance, slightly up from 10% last year, while 16% reported receiving 100% health coverage tuition and daycare, also up from 13% last year.
In a sign of the increasingly mobile and electronic times, 47% of respondents responded that they could "work at home when needed," up from 45% last year.
Only 1% said they had a private jet allowance, compared to 2% in 2012.
Responses varied somewhat depending on firm size.
Reasons for satisfaction with compensation seemed somewhat consistent across the board.
The highest number of respondents who felt that their compensation is fair for their position came from small firms with 1 to 249 employees. Around 34% of employees satisfied with their total compensation indicating this as their primary reason, compared with 25% at the largest companies. This discrepancy could be due to the fact that 6% of respondents from small companies also indicated they own their companies.
The highest number of respondents who felt that their compensation was competitive relative with others in the same position came from the 32% of respondents from mid-sized firms with 250 to 999 employees. But employees of those companies did not feel that their compensation is competitive relative to the industry, whereas anywhere from 11% to 19% of firms of other sizes felt their compensation is competitive. Note that no respondents of mid-sized firms felt that their non-cash compensation is competitive.
Employees of the largest companies with 5,000 or more employees seem to be unhappiest with the compensation they receive, with 24% of respondents claiming mild or absolute dissatisfaction, compared with 18% among the runner-up category, small companies.
Reasons for dissatisfaction with overall compensation varied depending on the size of the company.
Employees of the largest companies primarily took issue with compensation not being competitive relatives to others in the same position, which 36% of respondents indicated, and industry standards, or 29% of respondents. Around 21% were also concerned that they were not sufficiently compensated based on their effort and results.
Meanwhile, 100% of employees at large companies sized between 1,000 to 4,999 employees and 56% of the smallest companies reported that compensation was not competitive with industry standards, while 67% of employees at mid-sized companies said their compensation was inadequate for someone in their position. Respondents of small and mid-sized companies took the most issue with compensation not being inadequate relative to their job duties.
Overall, larger firms offered more of an even distribution of bonuses across the ranges. But smaller firms doled out the most at the top end of the bonus scale.
Thirty-eight percent of respondents from mid-sized firms and 29% of respondents from small firms (with 1 to 249 employees) reported that they receive bonuses amounting to 90% and more of their base pay. Meanwhile, only 11% of executives at the largest firms (with 5,000 or more employees) said they receive such high bonuses.
The largest firms also tended to offer bonuses of 5% or less of base pay more often than its smaller counterparts, with 17% of respondents at the largest firms responding that they received such compensation, compared with 5% to 15% reporting bonuses of 5% or less elsewhere.
But where 33% of mid-sized firms offered bonuses in the 20% to 30% of base pay range, and 21% of small firms offered bonuses in the 30% to 40% of base pay range, only 6% of respondents at small firms reported receiving bonuses in the 60% to 90% of base pay range, and none did at mid-sized firms.
Now, the good news: The average salary for respondents this year is $179,000, up 3.2% from $173,200 in 2012 and 15% from $151,900 in 2011.
While the largest companies seemed to have the unhappiest employees, 77% of respondents still reported they find some level of satisfaction with their current compensation, compared with 88% at mid-sized companies and 84% at the small companies.
The happiest?
Employees at large companies with 1,000 to 4,000 employees, where 90% reported satisfaction.
