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Executive Compensation - 2010 Executive Compensation

Compensation optimism returns to Houston IT executives.  

Executive Compensation Results

By James Del Monte, JDA Professional Services, Inc.

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In JDA Professional Services, Inc.’s ("JDA’s") latest Houston IT executive salary survey, we polled over 100 CIOs or IT directors (top IT person).  As salaries over the last 3 years have been relatively flat, more increases have been given in 2010.  Cautious optimism returned this year as most experienced a base compensation increase, ranging from 0 percent to over 10 percent in 2010 with the majority in the 3-6 percent range.  This is up from 2009 when more companies froze salaries or had 2-4 percent increases.  

The big increases, ranging from 0 percent to over 100 percent, were in anticipated bonuses being paid for 2010.  This is in contrast to 2009 when more companies did not pay out bonuses.  The bonus range was very broad and represented a large portion of compensation for some senior executives.  As to be expected, larger companies or software-type companies had the larger incentive programs resulting in higher total compensation.  As companies’ profits increased more bonus programs have paid out than in previous years.  

The results were analyzed by both company revenue and IT staff size.  The top and bottom amounts were dropped to give a more average range.  JDA divided the remainder into three groups: low, mid, and high.  To use the survey accurately, use both data sets to determine an average based on your company’s revenue and IT staff size.  

The Overall Houston IT Market

Overall IT salaries increased for 2010, ranging from 0-6 percent with most companies ranging from 2-4 percent of base.  Confidence returned this year, and executives could anticipate increases up from 2-4 percent to 3-6 percent for 2011.  There are a couple of reasons for the increase we’re seeing.  One reason is that companies realize the pent-up demand for top talent is causing turnover in their staffs.  Additionally, because of that turnover, retention plans are becoming more critical as companies seek to retain their most talented employees rather than risk losing them to other opportunities.  

In a survey conducted earlier this year, JDA uncovered that 73 percent of employed candidates were either actively or passively exploring new opportunities primarily to increase their base salaries.  Further, JDA determined that currently employed in-demand IT professionals who would have moved a year ago for a 0-10 percent increase now expect an increase of 5-20 percent to justify making a move.  

This increase in demand is having a compression effect with a company’s existing staff, especially with companies who have had salary freezes or minimal increases over the last 2-3 years, and it’s feeding the turnover cycle.  With more companies adding variable compensation components such as bonuses and paid time off to their packages at the staff level, more candidates are taking total compensation into consideration when evaluating offers.  

In a competitive market with more sophisticated candidates, the total package has become the benchmark for making decisions.

For more information on this survey or to discuss your staffing requirements, please contact James Del Monte at 713.548.5444 or jdel (at) jdapsi (dot) com.


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