Economists, policy-makers and other finance spectators may lose sleep over unemployment numbers each month, but experts say that there may be no better time to be a senior executive.
The US unemployment rate for November is expected continue its downward march, after it hit a 5.8% low in October. But the Fed’s beige book predicts a mere 0.2% increase in hourly wage growth this month, which is only a modest 2% boost from the previous year.
If this appears to be only a marginal improvement from the recession years for the middle class, top-level executives have had less to worry about.
Microsoft shareholders just cleared a fat $84m pay package for CEO Satya Nadella. The amount includes base pay, of $918,917, a $3.6m bonus and $79.8m in stock grants that won’t vest until 2019.
Nadella isn’t alone. According to a the 2014 CEO compensation strategy report by Equilar, an executive compensation and corporate governance data firm which conducted the report in association with compensation consultant firm Meridian, the median income of CEOs of S&P 500 companies was $10.1m at the end of 2013. This reflects a 9.5% increase year on year and a staggering 43% jump from 2009. Hourly wages since 2009 for non-farm workers on the other hand rose 23.6%.
It doesn’t stop there. The median salary for the chief executives of S&P 1500 companies (representing 90% of US market cap) rose a healthy 8.5% year on year to $5.0m.
If you are anywhere near the top post, not for you post-recession flavoured 2% wage growth. The good times extend not just to CEOs, but across the entire upper echelons of corporate powerhouses, say hiring experts. That became evident this week when hackers released salary data from Sony showing that 17 of the company’s executives make more than $1m a year each.
Across industries, businesses are boosting pay for executives in the belief it will draw the best people to their teams. Perks abound.
“2008-09 was hunker-down mode,” says Joe Huddle of DHR International. Companies that were cutting costs in 2009 tried to make do “more with less”. But now, with the elbow room to be hire aggressively, executive compensations are even more outsized, he says.
The VP who found his professional soul
While the prosperity extends across the healthcare, basic materials and consumer goods industries, bosses had the best median compensation, according to Equilar’s report.
Technology companies, often smaller, had the lowest median CEO salaries.
However, there’s been a sharper hill to climb with other sectors since 2009, says Sam Wholley of Riviera Partners, a prominent executive search firm from Silicon Valley. But the Valley has seen less turbulence in the executive job market.
Whatever skyrocketing compensation numbers say, wealth is not the primary motivator for senior executives, says Jason Hanold, a former head of talent divisions for Deloitte and McKinsey and a managing partner of his executive search firm Hanold Associates.
He often chats with senior executives who have already made “more money than they ever thought they would” and are now asking themselves “What do I want to do?” he explains. “People are getting in touch with their professional soul.”
It turns out that ex-Wall Street executives and business mandarins now want to follow their passions and get paid big bucks. And what jobs are they taking? “Anything you can describe as mission-driven or businesses that make lives better.”
Hanold says that life sciences, healthcare and non-profit sectors are attracting the best talent, thanks to a widespread desire to do good professionally.
The beach is the new boardroom
It’s not just salary. It’s also perks. If Silicon Valley has long led the business world in the perks it offers, it won’t stop now, when demand for talent is higher than over. Wholley says they’ve seen counter offers of multiple millions of dollars, homes and rich equity packages. One organization sent a job candidate videos of a prospective management team saying how much they would love to have the executive join, says Wholley.
Hanold says large organizations are increasingly letting their C-suite executives live and work from atypical locations. Hanold points at clients like Flextronics with 200,000 people around the world and with its CEO based in a Sunnyvale office. “Their chief HR officer is in Vienna, Austria. He has five children. Young man, young family. He doesn’t want to relocate them.” says Hanold.
It’s not just the large companies. According to ADP’s payroll data, nearly half of all jobs added in November came from small businesses. And these businesses, are leveraging technology to base themselves in towns and cities with the best lifestyles, senior executives in tow.
“We would talk about job growth in New York, Chicago, Houston,” he says about the locations of new ventures and headquarters. “We weren’t talking about Park City or Bismarck,” he says alluding to smaller US locations which have recently topped job growth lists.
Corporate top guns at startups are choosing to move to towns that offer the best lifestyle. “Whether it be mountains, oceans, warmer weather environments,” Hanold adds.
“People are finally retiring”
Beaches, small towns and saving lives. Is the C-suite going soft? Actually, it’s growing younger.
The average age of the S&P 1500 CEO significantly dropped from 53.0 around 2009 to 50.8 at the end of 2013.
“Remember in 2009 and 2010, people were putting off their retirements because the stock market was in such disarray?” says Joe Huddle, about the industrial sector’s aging talent. “Now five years later, people are finally retiring.”
This is pushing younger executives up the corporate ladder, and these executives are concerned about more than just money. They want work-life balance, says Hanold. One of his clients is a publicly listed company whose oldest executive committee member is 48 – and it’s not even a Silicon Valley frat-party startup, but a 60-year-old manufacturing firm.
“They’re the least sexy company we can talk about,” Hanold laughs. He explains that younger executives care more about friendly offices and welcoming work cultures.
When Nike wanted to hire a new CIO, their top candidate was a London-based executive who they would have to convince to move to Portland, a city he had never visited. The HR director’s plan of action wasn’t just to offer big money, explains Hanold. It was to end a series of interviews by assembling Portland’s best artists in his home and throw a party in his potential hire’s honor. He wanted to show him how laid back and diverse the city was.
By the end of the customized, specially arranged evening, the CIO-to-be was convinced. “Sign me up,” he said, Hanold recalls.
Original Article
Source: theguardian.com/
Author: Siri Srinivas
No comments:
Post a Comment