Executive Level Compensation
by akronadmin on June 2, 2014
Properly compensating valued employees at the Executive level can be one of the most challenging issues for even the most seasoned HR Professionals. Determining an appropriate compensation package that is above or equal to market value without setting unrealistic annual increases or subsequently driving up the market price can be difficult to navigate. As a regional-cross industry survey, the HRA-NCA Compensation Survey can help determine market value accounting for year to year market fluctuation and a comparison with the Federal Government without a costly evaluation by consultants.
Like all 542 survey jobs, the HRA-NCA Compensation Survey reports Annual Salary, Short-Term Incentive and Total Cash for Executive level jobs across five selection criteria: Gross Revenue (operating budget for Non-Profits), number of Full-Time Employees, Industry, Job Site Location and a breakout line for Government Contractors (companies that generate 50% or more of their revenue from Federal contracts). A further breakdown of Government Contractors data across the above selection criteria is included in a special cut of the compensation survey called the HRA-NCA Government Contractors Compensation Survey. Taking for example the Chief Human Resources Officer, the survey reports that the 50th percentile for annual salary across the total survey is $188,800 for Government Contractors this number rises to $188,900 with sixteen employers reporting.
The survey job page is an easy way to price a job quickly by examining the selection criteria for your peer group; however for a full look at Executive Compensation in the HRA-NCA Compensation Survey we also include sections on Federal Data and Compensation Analysis as well as an option for Special Cuts.
The Federal Data section of the survey reports data provided by the U.S. Office of Personnel Management (OPM), the agency within the Executive Branch of the federal government that has primary responsibility for human resources management. Staff in OPM’s Division for Strategic Human Resources Policy determine the occupational series, if any, containing federal government jobs that match jobs in the HRA-NCA survey, and the appropriate pay grades for these jobs. Data is reported by OPM for number of positions in the Greater Washington-Baltimore region along with average and median pay. This data provides a valuable insight into how the Federal Government pays their employees and can help you determine the market you are hiring against in the area. In the 2013 survey OPM reported that the Chief Human Resources Officer position received a median pay of $144,385 reported for 639 employees at pay grade 15. Compared to the figure in the total survey, the Federal Government is compensating this position between the 10th ($132,700) and 25th ($156.600) percentile for the region. This is expected as the Federal Government offers a significant portion of their total rewards in the form of Benefits, and confirms the survey ranges reported are in the right ballpark.
The Compensation Analysis section includes average and median base pay reported in the previous and current survey year as well as the percent change and number of Employees/Employers reported. When comparing data from year to year it’s important to remember that with any survey source, data can vary based on the fluctuation of participants in any given year. So, a second table is included with only repeat participants reported. Companies that participated in both the 2012 and 2013 surveys reported that in 2012 the position Chief Human Resources Officer was paid a median of $178,200 and in 2013 the median rose to $180,000 for a 1% change in Median. This indicates that there wasn’t very much turnover for this position and annual pay increase has leveled off for this position for repeat participants. This is confirmed on the job page under New Hire rates which indicates only two companies reported a new hire for this position.
During data collection respondents are asked to report Long Term Incentive Pay for Director and Executive level jobs, not only in terms of eligibility and receiving, but also how LTI is awarded in the form or Stock Options, Restricted stock, Performance Shares and Long-Term Bonuses. This information is broken out in the Total Survey Summary for each job and further detail is available to respondents in Special Cuts which can be requested from our Survey Administration team.
Using a combination of data sources within the survey publication, including selection criteria on each job, Federal Data reported by OPM and the Compensation Analysis section, the survey is able to provide a comprehensive look at Executive level jobs. For more information about what is reported on each job, check out our “Anatomy of a Survey Job” feature which includes an interactive sample of compensation data with typical data reported and further guidance on how to interpret each breakdown.