Base salary was unchanged for just over half of CEOs and 27% got raises greater than 5%. Base pay increases were not out of line, given enterprise growth performance; 43% of middle market enterprises expect to book EBITDA growth above 10% in 2021. (The year before, by contrast, 58% of CEOs had no change in base pay and 11% received a raise of more than 5%.) At the same time, nearly a third got short term incentive pay worth between $150,000 and $500,000. Finance, sales, and marketing leaders enjoyed larger percentage base-pay increases than their boss, with more than 54% of CFOs getting raises, as did 54% of CMOs and 61% of heads of sales. In the companies responding to this survey, not one sales leader took a salary cut—a reflection of the generally robust revenue growth these companies enjoyed and the importance of sales leadership and sales relationships to sustained top-line performance.
“While revenue growth is always a key metric, it’s the major focus for companies as they continue to navigate the pandemic. The sales leader has been even more under the spotlight and in many cases has delivered outstanding results—as the data on sales- leader compensation show. The challenge for sales leaders is how to maintain their torrid sales pace and turn new business into deep relationships as the pandemic eventually winds down.” — Ed Wallace , Managing Director of Human Capital, AchieveNEXT
The structure of short- and long-term incentive packages has evolved in the last year. Two changes are particularly
notable. One is an increased emphasis on revenues as a trigger for short-term incentive pay. A revenue incentive figures into the compensation plan for 41% of C-suite executives, up from 28% in 2019-20. More companies also base incentives on EBITDA and operational goals. The second noteworthy change: Customer and employee satisfaction can trigger incentive pay in 10% of companies; those numbers, while not large, are double what they were in last years’ survey. That trend is likely to continue: Forty-four percent of respondents say that they either already offer or plan to offer non-financial incentives based on goals such as diversity and inclusion, customer experience/ satisfaction, and employee experience. Not surprisingly, sales and marketing executives are most likely to be rewarded for hitting revenue and customer satisfaction targets, while HR executives are most likely to have human-capital targets and, across the board, less likely to be given a personal stake in financial performance. Also appropriately, the CEO, COO, and CFO—three executives with the most responsibility for cost—are most likely to have profitability as well as revenue targets.
8 I 2021-2022 Mid-Market Talent Acquisition, Executive Compensation and Culture Study — Powered by Insperity
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