More corporate boards are keeping base salaries steady while adding other perks (i.e., bonus payments, stock options, restricted stock awards, long-term incentive plans), according to ERI Economic Research Institute.
The May 2007 ERI/CareerJournal.com ERI Executive Compensation Index suggests the average dollar amount of executive bonuses has increased 119.9% since 1997, while base salary for the top executives increased by just 37%.
(Apparently, not every business executive thinks like Mitt Romney.)
The study showed that compared to the same period one year ago:
- Base salaries. The average increase for base salaries was 0.85 percent, with the annual base salary averaging $1,281,464.
- Annual bonus. The average company annual executive cash bonus increased by 23.63% compared to a year ago, with the average bonus sitting at $3,474,711.
- Total cash compensation. The average executive increase (base plus bonus) was 16.53%, or an average of $4,756,357 among top executives.
At 3Com, for example, the computer networking company’s newly appointed chief financial officer, Jay Zager, is pulling in $860,000 for his first year on the job. This is due to the combination of a $400,000 salary, $260,000 bonus after his first year, and a $200,000 signing bonus. The Marlborough, Massachusetts-based company also allegedly offered 300,000 shares of restricted stock and seven-year options to buy 500,000 shares of stock.
Likewise, Eastman Kodak is offering one of its top executives a handsome bonus in recognition of “increased responsibilities,” according to a regulatory filing. Philip Faraci, the company’s president of consumer digital imaging, will receive a 15% raise (from $520,000 to $600,000 annually), as well as a bonus of up to $450,000 a year.
And in other news, minimum wage will now hit $5.85 per hour by the end of the summer (officially up 70 cents from $5.15 per hour, capping off at $7.25 per hour in 2009).