IRO compensation immune to recession
May 24, 2010
Survey finds average IR base salary at $168,000
Hard economic times haven’t much dampened demand for good IR according to a new survey conducted by NIRI and management talent scout Korn/Ferry International. The survey of NIRI member and Fortune 500 IROs shows average base salary ranges along with departmental budgets and staff numbers have held roughly steady since the recession began.
‘These results are very supportive of the value that high-quality IR brings to public companies,’ says NIRI president and CEO Jeff Morgan. ‘High-performing IROs should recognize this value and, if they aren’t already doing so, take steps to ensure their management team is aware of it.
‘Top-notch IROs can and should use their record of performance to their advantage as they seek to negotiate a fair compensation package based on the increased value they bring to the organization.’
The survey reveals the average respondent’s salary to be $168,000, with a median of $156,000. While the largest survey segment reports a range of $126,000-$150,000, about half of the Fortune 500 respondents earn more than $225,000 annual base salary, with the crème de la crème netting as much as $700,000. When viewed by title, 84 percent of ‘manager’ titled respondents report a base salary less than $125,000. Almost half of those titled ‘senior vice president’ among the survey participants report base salary in the range of $201,000-$275,000.
In terms of non-salary compensation, 80 percent of respondents receive equity. Compared with the last survey in 2008, fewer are getting stock options (63 percent vs 71 percent) while a greater proportion now receive restricted stock/units (75 percent vs 63 percent). Nine out of 10 IRO packages include 401(k) plans, 84 percent include health insurance and 27 percent report deferred compensation plans.
One key compensation area that took a modest post-recession hit is cash bonuses, which declined for 65 percent of respondents. Still, for 41 percent of Fortune 500 respondents, that meant a bonus of at least $100,000.
The average survey respondent holds an MBA (52 percent) and the top professional fields IR draws from are reported to be corporate finance (28 percent), accounting (16 percent) and corporate communications/PR.
Morgan says the results demonstrate that a communications background is definitely an asset but adds that ‘the most successful IROs are very comfortable working their way through financial statements, and understand the nuances of equity valuations.’ He notes that NIRI provides relevant education to get up to speed, but recommends that non-financial types consider taking accounting and/or finance classes.
‘During the recessed market, many IROs took on greater workloads as organizations downsized, most without receiving a salary adjustment,’ says Pepper Binner, senior client partner in the corporate affairs practice of Korn/Ferry International, in a press release. ‘As the economy rebounds we are seeing the hiring market open up, with demand particularly high for IRO candidates with steep financial acumen and analyst capabilities, experience building an IR function from the ground up, and crisis communications expertise.
‘Employers would be wise to think competitively about their compensation strategy in order to recruit the best IR talent available in the market, and retain the existing talent they have within their organization.’