Salary.com™ Releases Results of a Comprehensive Small Business Compensation Survey

October 18, 2006; 07:53 AM
Salary.com, Inc., a leading provider of on-demand compensation management solutions, today released the results of its 2006 Small Business Executive Compensation Survey. The new survey is one of the most comprehensive sources of small business compensation data available. The survey reports on 12 key executive job functions and includes data from more than 1,800 organizations representing more than 50 industries, 15 regions, all 50 states, 96 metropolitan areas and 10 size ranges.

“More than 99 percent of companies in the US have fewer than 500 employees, yet they’re at a disadvantage compared to larger companies when it comes to finding relevant compensation data,” said Jeffrey Blue, director of marketing for Salary.com. “We conducted this survey to provide small business owners and executives the information they need to develop competitive pay practices and win the war for talent.”

According to the survey, the national average salary for the CEO/Partner/Owner job function is $258,400; however, compensation varies widely across geographies. For example, small business CEOs/Partners/Owners in the District of Columbia earn $395,000 annually -- more than 2.5 times as much as their counterparts in Oklahoma.

Below are lists of the top and bottom states and metro areas for CEO/Partner/Owner Pay:

CEO/Partner/Owner compensation varies across industries as well, with the manufacturing industry paying its CEOs/Partners/Owners $254,700, or eight percent higher than the national median, and several industries paying well below the national median. For example, the retail trade industry pays $169,500 (38 percent lower than the national median), the construction industry pays $190,000 (23 percent lower) and the healthcare and social assistance industry pays $210,000 (11 percent lower).

The following table lists the median base salary and total cash compensation for each of the 12 executive job functions. To learn more, log onto: http://research.salary.com.

Executive Job Functions Within a Small Business

“We recognize that small business executives are compensated differently from their counterparts in larger organizations,” said Joseph Kilmartin, director of compensation for Salary.com. “This survey was built to better represent the combination of functional responsibilities within smaller companies and to provide data relevant to small- and medium-sized businesses.”

A detailed review of the survey results reveals that small businesses differentiate their pay packages based on organization size, ownership type, industry and location. For instance:

• Compensation for executives generally increases with company size, as measured by number of full-time employees and revenue.
• Executives at publicly held corporations typically earn significantly more than their counterparts in sole-proprietorships and closely held corporations.
• Higher total compensation in the mining, financial services and chemical manufacturing industries can be attributed to significantly larger bonuses, commissions and additional short-term incentives.
• In keeping with national trends, companies in the Northeast and West Coast regions tend to pay their executives more than organizations in the Midwest, South and Mountain States regions. In fact, 11 of the 12 job functions earn more in the Northeast and West Coast - the exception being Administration. The median base salary for Administration in the South is 19 percent above the national median, while it is 10 percent below the national median on the West Coast.
• The median total cash compensation for CEOs is highest in the Finance & Insurance - Funds & Trusts industry, at $683K, and lowest in the Transportation Equipment Manufacturing industry, at $130K.

About the 2006 Small Business Executive Compensation Survey

The 2006 Small Business Executive Compensation Survey was designed around broad job functions rather than more restrictive job descriptions typically found in most compensation surveys. The full report presents data for 12 key job functions from more than 1,800 organizations and is split into more than 230 “scopes.” Participants represent a broad range of industries across all 50 states and range in size from 1 to 500 employees. The survey reports pay practices within 5 regions including Northeast, South, Midwest, Mountain States and West Coast. The data is further divided by sub-regions, which include New England, NY-NJ, Mid-Atlantic, Middle Southeast, Lower Southeast, Great Lakes, Central Plains, South Central, Mountain States, Pacific Northwest and Pacific Southwest. To learn more or to purchase a copy of this survey, please log on to http://research.salary.com.

About Salary.com, Inc.

Salary.com is a leading provider of on-demand compensation management solutions helping businesses and individuals manage pay and performance. Salary.com provides companies of all sizes comprehensive on-demand software applications that are tightly integrated with its own proprietary compensation data sets, thereby automating the essential elements of the compensation management process and significantly improving the effectiveness of its clients’ compensation spend. For more information, visit www.salary.com.