* * *
Are most CEOs satisfied with their compensation? Are there perks or benefits they'd like to have but don't?
We'll tell you what they told us. Only 3% of the CEOs we surveyed allowed that their 1988 compensation might be "too high" (nobody offered to give any of the money back). The least happy of them seemed to be concentrated in businesses with less than $1 million, where 58% said their pay was "too low," and in retailing (53%). Most CEOs (54%) indicated they were paid "about right." The most content? CEOs of wholesale or distribution businesses (61%) and companies with revenues of $10 million or more (68%).
As for the extras, most CEOs are apparently well set. When asked what perks or benefits they'd like to receive and currently don't, 69% of the respondents left the question blank. And what about those who did answer? Fifteen percent said "none." For the others, it depends on what stage they're at. CEOs at companies under $1 million wanted the basics: cars (19%), health insurance (23%), or pensions (20%). But once sales exceed $5 million, the focus shifts; 12% wanted supplemental retirement benefits, and 12% mentioned country-club memberships.
THE TAKE AT THE TOP
A look at how CEOs fare in salary, bonuses, benefits, and perks. And what their top executives make based on industry and size of company.
CEO BENEFITS AND PERKS
Company car & expenses 80%
Supplemental life insurance* 57
Tax-return preparation 48
Club dues & expenses 39
Supplemental medical 36 insurance*
Personal tax & financial planning 28%
Low- or no-interest loans 24
Supplemental retirement 17 benefits*
Deferred compensation 13
First-class air travel 10
Moving allowance 9%
Housing allowance 5
* Beyond customary companywide benefits
THE CEO: A profile of the typical chief executive officer
Total compensation $104,802
Base salary $78,161
Percent receiving bonus 49%
Bonus $49,028
Bonus as a percent of 29% total compensation
Age 46
Equity held 67%
Percent with no equity 5%
Percent who are founders 74%
All figures are averages.
THE COMPANY: A profile of the typical company
Total revenues (FY 1988) $6,774,008
Number of employees (FY 1988) 104
1988 payroll $1,452,636
Payroll as a percent of revenues 29%
Percent that are privately owned 94%
All figures are averages.
TOTAL COMPENSATION FOR TOP OFFICERS BY COMPANY SIZE
$10 million or more
Sector CEO COO CFO CMO*
Service $220,453 $130,014 $91,237 $128,003
Manufacturing 183,975 110,397 87,799 94,867
Distribution 153,489 98,927 79,318 85,765
Retail 141,644 96,120 73,767 73,883
Overall 189,043 112,840 85,928 101,433
$5 million to $9.99 million
Sector CEO COO CFO CMO*
Service $198,947 $120,538 $130,043 $150,988
Manufacturing 144,289 81,815 54,448 77,761
Distribution 107,609 77,892 62,767 60,837
Retail 131,015 80,822 53,375 88,750
Overall 153,694 93,782 82,829 91,491
*Chief marketing or sales officer
$1 million to $4.9 million
Sector CEO COO CFO CMO*
Service $132,508 $76,517 $54,496 $72,135
Manufacturing 100,085 56,496 48,460 52,346
Distribution 91,737 54,737 43,896 53,840
Retail 72,670 50,817 35,706 53,773
Overall 108,449 65,720 51,880 60,447
Less than $1 million
Sector CEO COO CFO CMO*
Service $61,443 $45,554 $39,378 $42,081
Manufacturing 47,723 33,923 27,820 38,279
Distribution 36,589 30,000 24,200 51,025
Retail 34,530 28,964 26,239 33,742
Overall 54,874 41,241 36,655 42,274
All figures are averages.
DETERMINING BONUS AND SALARY FOR TOP OFFICERS
Companies paying bonuses 65%
Basis for allocation of bonuses*
Discretionary 59%
Achievement of profit goals 32
Achievement of sales goals 27
Percent of profits 26
Percent of sales 10
Return on equity, assets, or sales 9
Companies with a bonus pool 65%
Basis for determining the size of bonus pool**
Discretionary 62%
Fixed formula 17
Formula set annually 16
Other 6
Basis for increasing executive salaries*
Company performance 59%
Discretionary 52
Individual performance 38
Cost of living 12
*Total exceeds 100% because of multiple responses.
**Total exceeds 100% because of rounding off.
THE FACTS BEHIND THE FIGURES
This is the eleventh consecutive year that INC. has conducted an executive compensation study. In April we mailed a four-page questionnaire covering salaries, benefits, bonuses, practices, and policies to a random sample of 20,000 subscribers. Data Tabulation Services Inc., in Stoneham, Mass., compiled the 1,126 usable returns.
A special report containing the complete results of the survey is available. The report -- while preserving the confidentiality of the survey responses -- provides detailed information not included in this article. To obtain a copy, please fill out the postpaid card bound in this issue, or send a written request and a check for $98 ($95, plus $3 shipping and handling) to 1989 INC. Executive Compensation Study, P.O. Box 68618, 6360 LaPas Trail, Indianapolis IN 46268, or call (800) 372-0018, extension 3400.
The survey was conducted under the direction of special projects editor Sara Baer-Sinnott. Research assistance was provided by Teri Lammers.
