Fred Clayton in the news.

Investor Relations: “Payday Analytics”

Periodically, the National Investor Relations Institute (NIRI) commissions a survey of compensation practices and reports the findings in its national publication, IR Update. “Payday Analytics” is the cover story for the October edition and summarizes changes in the compensation and related employment practices since the previous survey was conducted two years ago. I was invited to comment for the article which can be found by CLICKING HERE

The following are some of the observations I shared with the author that appear in the story.

• An average 2% inflation–adjusted rise in annual pay is hardly newsworthy but what is significant is the continuing shift toward emphasis on variable pay (i.e., bonus, long-term incentives and equity). This practice enables companies to keep base salaries, and therefore overhead, in check; and, reward executives with higher variable pay in good years, and make lower payouts in lean years. This trend is not limited to the investor relations profession but is a practice that has taken root in many industries and professions. I expect it will continue.
• The survey also found that companies have been hiring people with Wall Street experience at an ever increasing pace, no doubt much to the disappointment of communications executives who once dominated the investor relations field. Although communication skills will always be important in the profession, capital markets knowledge and strong financial acumen are the name of the game today, and will continue to be. Historically, finance executives have generally been paid more than communications executives so, as companies continue to pursue Wall Street professionals for their investor relations positions, I expect average total compensation in the profession to continue to rise – with variable pay and equity as the major drivers.
• The pay gap between genders still exists, although it is continuing to shrink. In 1998, the disparity between men’s and women’s base salaries was 67%; today it is 23% – which still is not acceptable but the gap is narrowing. In fact, it is our experience that up-and-coming men and women in the profession are paid comparably. As they progress in their careers toward top management positions, I believe the gender gap will continue to slide.

 

Fred Clayton

Chief Executive Officer

Head of Finance and Investor Relations Practice

Berkhemer Clayton, Inc.