Specialists at the top of the executive supply chain are making salary gains at the expense of top end generalists, particularly chief executives. This is one conclusion that could be drawn from this year’s NZIM and Brookers national salary survey. These results support global trend towards the rise and rise of managers with specialists skills.
The New Zealand Salary Benchmarks survey covers 57 management and employee positions across broad range of businesses. And, surprisingly, the average remuneration package slipped 4.5 percent from $83,424 last year to $79,700. Even the average base salary paid to respondents dipped, from $69,031 last year to $68,933.
It is surprising result. But most surprising is the way in which the drop seems to have impacted the generalist more than the specialist manager. Chief executives, for example, have been hit. The value of the average total package paid to CEOs fell by little over seven percent, from $182,762 last year to just $169,576 in this latest survey period. And the average base salary paid to CEOs who responded to the survey dipped almost two and half percent from $149,318 to $145,709. That is quite significant given inflationary pressures and the so-called shortage of talent in the marketplace.
The trend away from performance-based remuneration packages for CEOs continues. Only 64 percent of recipients were on performance-based packages compared with almost 70 percent last year. But the average value of the performance component increased slightly from $13,102 last year to $14,361 in this survey. Against this, higher percent of CEOs, 68 percent compared with 62 percent last year, were offered superannuation to an average value of $4690 which is more than double the average $2068 offered last year.
And while more CEOs have car included in their package, up from 48 percent to 53 percent, the average value of the vehicle fell from $23,571 to $21,743.
But if CEO remuneration has slipped in this year’s survey, more specialist executives have fared better. Chief finance executives/directors, general managers, HR managers, information systems directors, audit managers, administration managers and executive secretaries, to name just few, all notched up remuneration package increases this year.
Chief finance executives/directors have, for example, lifted their average total package by as much as CEOs have fallen, healthy 7.5 percent to $148,901. And their average base salary climbed 20 percent to $126,897. That is significant increase in any bean counter’s lexicon. HR managers scored even better, with 10 percent lift in both their average total packages and their average base salaries, up to $87,391 and $80,967 respectively.
Despite their dip in fortunes over the past year, CEOs are optimistic about their future pay and prospects. solid 98 percent of them are forecasting average increases of at least six percent in the coming year, similar to what they incorrectly predicted last year. So much for their forecasting skills. Not surprisingly, chief finance executives/directors expect their salary packages to improve by at least eight percent next year.
This is the second year NZIM has partnered with Brookers to conduct its national salary benchmarks survey. The findings are based this year on responses from 404 organisations. The responses were gathered between September and October and were published at the end of November.
With 64 percent of the responses coming from the service sector, the survey reasonably reflects what has happened to the New Zealand economy. On the other hand, 35 percent of responses were from organisations employing more than 100 people – not such good reflection of the composition of the economy.
In general terms there is continuing drift away from performance-based remuneration and steady move toward more employees being offered superannuation as part of their package and terms of employment. Mobile phones were offered by almost 40 percent of all organisations who responded to the survey. And laptops were offered by 32 percent.
Almost third of organisations offered subsidised medical insurance and 15 percent provided work-from-home options. Other employment incentives included employee discounts (24 percent); company sponsored Friday night drinks (26 percent); tuition reimbursement (42 percent); and company vehicle (26 percent).
Our involvement in this survey is important. It provides NZIM members with valuable additional service and the opportunity to benchmark their organisation’s employment practices and remuneration strategies. Looking after people is critical in today’s competitive marketplace and there is no question we can always do better. Copies of the report are available by going to www.nzim.co.nz.
David Chapman is national chief executive of the New Zealand Institute of Management.
