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Executive Pay Packages Expand As The Talent Pool Shrinks According to ExecuNet
Despite Increased Scrutiny, CEOs Believe Pay Is Reasonable
www.execunet.com — March 6, 2007 — As demand for executives, which reached a six-year high in 2006, continues to increase, companies are providing corporate leaders with additional forms of compensation, including guaranteed severance, stock options, and sign-on bonuses.
According to a survey of 257 executive recruiters conducted by ExecuNet, the leading executive career, business, and recruiting network, 71% say the war for talent is more intense today than just one year ago and 67% believe there is currently a shortage of qualified executive talent in the market. Amid this growth in executive-level employment opportunities, compensation packages are becoming larger:
Compensation Data For Executive Hires
2006 Compared to 2007
Element
Percent of Packages 2006
Percent of Packages 2007
Percent Change
Non Complete
Agreement/Contract
32%
48%
+ 50%
Guaranteed Severance
26%
37%
+ 42%
Stock Options/Equity
36%
47%
+ 31%
Performance Review
Within First Six Months
35%
44%
+ 26%
Sign-on Bonus
31%
37%
+ 19%
Performance Bonus
73%
79%
+ 8%
"Necessity is the mother of most compensation incentives," says Mark Anderson, President of ExecuNet. "While executive compensation has come under increased scrutiny, companies competing for talent in this marketplace are left with two choices: offer bigger paychecks or risk losing their best candidates to competitors."
More Lucrative Days Ahead
A separate, simultaneous survey of 548 corporate Presidents and CEOs conducted by ExecuNet, reveals high compensation expectations for those in the executive suite. While 73% believe they are equitably compensated, CEOs and Presidents would expect to receive an 18% increase in total compensation if they were to make a job change in 2007.
"The feedback from CEOs in our network suggests they are fielding multiple offers before deciding to jump ship," says Dave Opton, CEO and Founder of ExecuNet. "In light of this increasing competition, there's no question that making a job change will prove very profitable for executives in the year ahead."
ExecuNet, the leading executive career, business and recruiting network, provides exclusive access to high-level business connections for professionals, confidential six-figure job listings, expert advice and proprietary research while helping corporate and search firm recruiters find qualified executive candidates. Founded in 1988, ExecuNet helped transform the executive recruiting industry by launching the first website designed to bring senior-level professionals and search firms together in a cooperative, confidential environment to understand how to meet their human capital needs.
Based in Norwalk, Connecticut, ExecuNet is a recognized authority in executive recruiting trends and proprietary employment market research. For more information, visit www.execunet.com.
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