Center Survey Says 92% of Executives are Eligible for Merit Increases

Thanks to all who participated in our updated survey on executive titling and benchmarking practices, with 73 participants! Here’s a glimpse at some of the results, and comprehensive results are linked here.

The Executive Population

• Executives represent less than 1% of the regular, full-time employee population for nearly 78% of companies surveyed.  Approximately 10% of companies indicate the executive population represents between 1.0-1.5% of their workforce.
  
  
  • 53% of respondents categorize executives in positions of Vice President or above; only 19% consider Senior Director/ Director and above roles as executives. 
    
    
  • These results may reflect varying titling conventions used in the organization. For instance, some companies do not utilize the Vice President title.

Executive Criteria

• Two thirds of those surveyed indicated that executives must be at a certain job band/grade level to be defined as an executive. Other criteria include:
  
  
  • Specific job titles like VP and above (42%)
    
    
  • Reporting relationship to C-Suite, etc. (10%) 
    
    
  • Only 2 respondents consider a certain threshold of compensation as criteria. 
    
    
• Nearly all (96%) respondents use the job evaluation process to assess scope of duties as a basis for determining the executive level. 
  
  
  • 51% of respondents also use market data and/or reporting relationships.
    
    
  • Additionally considered were other compensable factors like strategic importance of the role, influence on stakeholders, role complexity and financial scope and leadership potential.

Executive Compensation Team

• 89% of respondents have a dedicated resource for executive compensation. This reflects increasing complexity and risk surrounding the field of executive compensation as well as Board attention on this topic.

Merit Increases

• A surprising majority (92%) of respondents indicated that executives were eligible for merit increases in line with the general employee population. While this group may be eligible to receive an annual merit increase, the same percentage of executives may not actually receive an increase each year. In addition, NEOs are likely to be excluded from the broad-based annual merit planning process.