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2014 Policies, Practices and Merit ReportIncludes 2015 Merit Forecasts
July 2014
©2014 Empsight International, LLC - Confidential Page 2
Table of Contents
Overview ......................................................................................................................................................................................................................................................... 3
About Empsight ....................................................................................................................................................................................................................................................... 3 Empsight’s 2014 Compensation Surveys ................................................................................................................................................................................................................ 4
Survey Participants .......................................................................................................................................................................................................................................... 5
Competitive Pay Philosophies ....................................................................................................................................................................................................................... 10
Competitive Pay Philosophy – Base Pay ................................................................................................................................................................................................................ 10 Competitive Pay Philosophy – Total Cash Compensation ..................................................................................................................................................................................... 11 Actual Practice versus Philosophy – Base Salary ................................................................................................................................................................................................... 12 Salary Structure Design: What is the primary basis for salary structure differentiation ...................................................................................................................................... 13
Salary Structure Increase Budget for 2014 ..................................................................................................................................................................................................... 14
Merit Increase Budget 2014 .......................................................................................................................................................................................................................... 15
Merit Increase Budget for 2014 by Industry ......................................................................................................................................................................................................... 16 Merit Increase Budget for 2014 by Revenue Category ......................................................................................................................................................................................... 17 Promotional Increase Budget ................................................................................................................................................................................................................................ 18 Special Competitive Adjustment Budget .............................................................................................................................................................................................................. 19 Total Increase Budget ........................................................................................................................................................................................................................................... 20 US Salary Budget Increase Commentary ............................................................................................................................................................................................................... 21
Forecasted Salary Structure Increase Budget for 2015 ................................................................................................................................................................................... 22
Forecasted Merit Increase Budget for 2015 ................................................................................................................................................................................................... 23
Forecasted Promotional Increase Budget for 2015 .............................................................................................................................................................................................. 24 Forecasted Merit Increase Budgets for 2015 by Industry ..................................................................................................................................................................................... 25 Forecasted Merit Increase Budget for 2015 by Revenue ...................................................................................................................................................................................... 26 Forecasted Special Competitive Adjustment Budget for 2015 ............................................................................................................................................................................. 27 Forecasted Total Increase Budget for 2015 .......................................................................................................................................................................................................... 28
Short Term Incentives ................................................................................................................................................................................................................................... 29
Bonuses Paid in 2014 for 2013 Performance ........................................................................................................................................................................................................ 29
Long Term Incentive Targets.......................................................................................................................................................................................................................... 30
2014 Stock Awards Commentary .......................................................................................................................................................................................................................... 33
2015 Staffing Expectations ............................................................................................................................................................................................................................ 34
College / MBA Hire Practices ......................................................................................................................................................................................................................... 38
©2014 Empsight International, LLC - Confidential Page 3
Overview
This report is derived from our On-line Survey of Policies, Practices and Merit conducted between April and July 2014. The analyses are based on the answers provided, in whole or in part, by 272 companies and covering the following topics:
Compensation Philosophy Analysis
Salary Structure Analysis for 2014
Merit, Promotional, and Special Competitive Adjustments Increases for 2014
Salary Structure and Merit Forecasts for 2015
Comments on Salary Modifications
Short Term Incentive Awards
Long Term Incentive Targets by Level and Department
Departmental Staffing
Analysis of Issues of Concern
Analysis of College /MBA Hiring Rates and Sign-On Bonuses
About Empsight Empsight International, LLC is a human resource consulting firm which helps employers make better decisions about their investment in people. Our primary focus is on conducting compensation surveys in niche markets, domestically and internationally. Our surveys are seen as definitive data reference sources in markets where such information is critical to maintaining competitiveness. Our clients are, predominantly, leading multinational corporations that have a high repeat participation rate in our surveys. Our Principals and staff have significant experience in consulting on compensation, organizational and human resource issues across multiple industry sectors.
©2014 Empsight International, LLC - Confidential Page 4
Empsight’s 2014 Compensation Surveys U.S. Law Department Compensation Survey With more than 450 participating companies, Empsight's portfolio of in-house law department compensation surveys is the largest of its kind in the U.S. In 2013, the Large Company Edition included 170 Participants with an average participant revenue size in excess of $32 Billion. The Survey targets larger Fortune 500 and Multinational companies with revenues of $3 Billion and Above. The survey reports data on base salary, annual bonus, long term incentives, and multiple sub cuts. The survey also provides useful legal spending and staffing analyses. Finance & Compliance Compensation Survey The Finance & Compliance Compensation Survey incorporates and expands on Empsight’s prior Compliance, Audit & Risk Compensation Survey which has become the leading source of information of its kind and reports on large multi-billion dollar organizations. The expanded survey now includes Finance and Accounting positions to round out this collection of functions more comprehensively. Positions in all these functions have been the subject of recent significant market momentum in the largest, most complex organizations. The Survey covers key benchmark positions at the Executive, Middle Management, Professional and Support Levels in the Finance, Accounting, Compliance, Audit, Risk sub-functions. Reported compensation elements include Base Salary, Annual Incentives, and Long Term Incentives. Digital Marketing / Marketing Compensation Survey The Digital Marketing / Marketing survey targets large Fortune 500 and multinational companies who have larger marketing organizations and a business to consumer focus. The survey has a focus on newer marketing areas such as digital marketing, big data (data analytics), social media, as well as including some of the more traditional areas of marketing / communications. Government Relations & Corporate Communications Compensation Survey The Government Relations Compensation & Corporate Communications Compensation Survey is the leading source of information of its kind and reports on large multi-billion dollar organizations with larger departments, many facing challenging regulatory, legislative, or taxation environments. The report provides a comprehensive summary of cash based compensation and selected other practices for benchmark positions in these functions. Information Technology & Security Compensation Survey The Information Technology & Security Compensation reports on large multi-billion dollar organizations with larger information technology and IT security departments. The Survey covers key benchmark positions at the Executive, Middle Management, Professional and Support Levels. Benefits of the Empsight IT compensation survey include: Genuinely large company peers - no mixing of large and small participants, Contemporary, full, benchmark descriptions providing clear differentiation between levels, Coverage of new and emerging roles such as Cloud Computing, and 123 Benchmark Positions, including IT and IT Security - covering Executive, Middle Management, Professional and Support levels. Human Resources Compensation Survey - This report is free to participants in 2014 The Human Resources Compensation survey reports on Generalist and Specialist HR positions in large multi-billion dollar organizations. This report provides a comprehensive summary of compensation and selected other practices for benchmark positions in the Human Resources function. Executive Administrative Support Compensation Survey This survey covers high level executive administrative support positions in the U.S. in Fortune 500 companies and other large multi-nationals. These positions are unique in the organizational structure and the Survey provides compensation data from genuine peer type companies. The Survey covers a comprehensive array of compensation elements for these positions and will include coverage of long term compensation, where available.
©2014 Empsight International, LLC - Confidential Page 5
Survey Participants
1st Financial Bank USA
3M Company
AAA Mid-Atlantic Inc.
Abbott Laboratories
AbbVie Inc.
Accenture
Acuity Brands
Aetna, Inc
Aflac
AIG
Alliance Data
Allstate Insurance
American Airlines
American Cancer Society, Inc.
American Century Investments
AmerisourceBergen Corporation
Amica Mutual Ins Co
Anheuser-Busch InBev
Apollo Education Group, Inc.
Aramark
Argos USA Corp.
Ascena Retail Group
AstraZeneca Pharmaceuticals
AT&T
Automobile Club of Southern California
AutoNation
AutoZone
Aveda Corporation
AXA
Bank of America
Barclaycard US
Baxter
BB&T
Belk, Inc.
BG US Services, Inc.
Big Heart Pet Brands
Black & McDonald
Bloomin' Brands, Inc.
BNSF Railway Company
Booz Allen Hamilton
Boyd Gaming Corporation
BP
Broadcom
Buck Consultants
C. R. Bard, Inc.
Cablevision
Calpine Corporation
Capital One Financial
Cargill
CarMax
Carter's
Cash America International
Caterpillar
CBRE, Inc.
Centene Corporation
CenterPoint Energy
CenturyLink
CF Industries
Charles Schwab & Co., Inc.
ChevronPhillips Chemical
Chipotle Mexican Grill
CHS Inc.
Chubb
Cigna
City National Bank
Cliffs Natural Resources
Comcast Cable
ConAgra Foods, Inc.
Con-way Inc.
Coriant (Formerly Tellabs)
Crowe Horwath LLP
CST Brands, Inc.
CVS Caremark
Cypress Equities
Deere & Company
Delhaize America
Deloitte & Touche L.L.P.
Devon Energy
DIRECTV
Discover Financial Services
Dollar General Corporation
Dominion Resources, Inc.
Domtar Corporation
DST Systems, Inc.
DTE Energy
Dupont
Dynegy
eBay, Inc.
Ecolab
Eli Lilly and Company
EndoChoice, Inc.
Enterprise Products, L.P.
EP Energy
Equity Residential
Erie Insurance
Estee Lauder
Express LLC
Farmers Insurance
Federal Reserve Bank of St. Louis
FedEx Corporation
Fifth Third Bank
First National Bank of Omaha
©2014 Empsight International, LLC - Confidential Page 6
Fiserv
Fox Networks Group
Freddie Mac
Freeport-McMoRan Inc.
GAF
Gannett Co., Inc.
Gap Inc.
GATX
General Mills, Inc.
Genpact, LLC
Genuine Parts Company
Great American Insurance
Great-West Financial
Gruma corp.
Halliburton Company
HD Vest Financial Services
Health Net
Hewlett-Packard Co.
Hilton Worldwide
Hormel Foods
Hughes Network Systems - an Echostar Company
Huntington National Bank
Huntsman
IGT
ING
Intellectual Ventures
International Paper
Iron Mountain
J.B. Hunt Transport Services, Inc.
Jackson National Life Insurance Company
JetBlue Airways
JM Family Enterprises
Johnson & Johnson
Joy Global
Kate Spade & Company
KB Home
Kimberly-Clark
Kinder Morgan
KPMG
Kroger Co.
Liberty Mutual Insurance
L'Oreal USA
LyondellBasell
Macy's, Inc.
Magellan Midstream Partners
Marriott International (on behalf of)
Marsh & McLennan Companies, Inc.
Mary Kay Inc.
MassMutual
MasterCard
Mattel, Inc.
McKesson
Merck & Co., Inc.
MetLife
Micron Technology
Minacs
Mohawk Industries, Inc.
Moody's
Mutual of Omaha
National Basketball Association
Nationwide Insurance
Navient
Neustar
New Mexico State Personnel Office
New York Life
Newell Rubbermaid
NewMarket Corporation
NewPage Corportation
NextEra Energy Resources, LLC
Nike, Inc
Nordstrom
Norfolk Southern
Novozymes North America
NuStar
Pacific Life Insurance
Patriot Coal
Penske Truck Leasing
Pepeco Holdings, Inc.
PepsiCo
Pfizer
Plains All American
PNM Resources, Inc.
Polaris
Principal Financial Group
Progressive Corporation
Publix Super Markets
PVH Corp.
PwC
QVC
Radian Group
Regal Beloit Corporation
Roundy's Supermarkets, Inc.
Royal Bank of Canada
Ryder System, Inc.
Ryerson
Sallie Mae
SAP AG
SCANA
Sears Holdings
Semiconductor Components Industries, LLC
Sentry Insurance
Simon Property Group
Sodexo
Sony Pictures Entertainment
Southern California Edison
Southern Company
SPX Corporation
Staples Inc.
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Starkey Hearing Technologies
Starwood Hotels & Resorts
Steelcase Inc.
SunGard
SUPERVALU
Swiss Re
Target Corporation
Tesoro Corporation
The Allstate Corporation
The Chubb Corporation
The Clorox Company
The Coca Cola Company
The E. W. Scripps Company
The Estee Lauder Companies
The Hanover Insurance Group
The Hartford
The Hershey Company
The Home Depot
The Kroger Co.
The Manitowoc Company
The TJX Companies, Inc
The Travelers Companies, Inc.
The Walt Disney Company
Thrivent Financial
Tiffany & Co.
Time Inc.
Time Warner Cable
Time Warner Inc.
Total System Services
Toyota Motor Sales
Tribune Company
Twentieth Century Fox
Tyson Foods, inc.
U.S. Bank
Unilever United States
Union Pacific
United Rentals
United Stationers
UnitedHealth Group
Universal Health Services, Inc.
Unum Group
URS Energy & Construction
Valero
Vectren Corporation
Verizon Communications
Viacom Inc.
Visa
Vornado Realty Trust
Walgreens
Wal-Mart Stores, Inc
Washington University School of Medicine
Waste Management
We Energies
WellCare Health Plans, Inc
Wellmark Blue Cross & Blue Shield
WellPoint, INC
Whirlpool Corporation
Williams
WPX Energy
Xerox Corporation
Yum! Brands, Inc.
Zurich
©2014 Empsight International, LLC - Confidential Page 8
Participant Profile - Industry The following column chart summarizes the 272 survey participants by industry.
3.3% 3.3% 3.3% 3.7%4.8% 4.8% 4.8% 5.1%
6.3%
8.1%
10.7%
12.5%
14.0%
15.4%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
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Participant Profile - Revenue The pie chart below summarizes participation by revenue size. 45% of the 272 participants have revenues greater than US $10 Billion.
$30 Billion and Above19%
$15-$30 Billion16%
$10-$15 Billion10%$5-$10 Billion
22%
$3-$5 Billion12%
$1-$3 Billion15%
Less than $1 Billion6%
©2014 Empsight International, LLC - Confidential Page 10
Competitive Pay Philosophies We asked participants to discuss their pay philosophies and we developed a series of questions focused on this topic.
Competitive Pay Philosophy – Base Pay Companies were asked to describe their compensation philosophy relative to market for base salary. 222 participants responded to this question. Clearly the
distribution of responses in the graph below shows that Market Median is the desired Base Salary competitive position for 83.7% of the participants
responding to this question. A Market Average targeted position was reported by 5.3% of the companies.
1.0%2.9% 3.3%
5.3%
83.7%
2.4% 1.4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
70%
75%
80%
85%
90%
Above P75 P75 P65 Average Median Below Median No Philosophy
Base Salary Philosophy / Market PositionFrequency of Responses
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Competitive Pay Philosophy – Total Cash Compensation In addition to Base Salary competitive positioning, companies were also asked to indicate their desired competitive posture relative to Total Cash
Compensation. 219 companies provided responses to this particular question and the answers are summarized in the graph below. Median is again the
dominant competitive posture for Total Cash Compensation as it was for Base Salary at 77.7% of the responses
1.5%
5.8% 6.3%4.4%
77.7%
0.0%
4.4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
70%
75%
80%
85%
Above P75 P75 P65 Average Median Below Median No Philosophy
Total Cash Compensation Philosophy / Market PositionFrequency of Responses
©2014 Empsight International, LLC - Confidential Page 12
Actual Practice versus Philosophy – Base Salary Since, philosophy, as represented by a company’s salary structure, is a desired or theoretical position, we wanted to know how closely actual salary practices
aligned with the stated philosophical competitive positioning. We asked companies to indicate if their practice on Base Salary was At, Above, or Below the
targeted market position. The answers from 216 companies are summarized below:
The majority of companies (75.6%) indicated that their Base Salary practices closely aligned with their desired competitive position as reflected in their
philosophy.
Above Position , 7.3%
At Desired Position, 75.6%
Below Position, 17.1%
Base Salary Practice -vs- Philosophy
©2014 Empsight International, LLC - Confidential Page 13
Salary Structure Design: What is the primary basis for salary structure differentiation The majority of companies (41.1%) indicated that geography was their primary basis for salary structure differentiation. A combination of geography and
industry (19.4%) was also widely observed as primary basis. The answers from 187 companies are summarized below:
Geography, 41.1%
Industry Segment, 5.7%
Business Unit, 10.3%
Combination of Geography & Industry, 19.4%
Other, 23.4%
Primary Basis for Salary Structure Differentiation
©2014 Empsight International, LLC - Confidential Page 14
Number of Salary Structures
Participants were asked to report the number of salary structures used in their organization. Responses were obtained from 190 companies and are
summarized in the table below:
Number Companies Average P 25 Median P 75
190 7.3 1.8 3.0 8.0
Salary Structure Increase Budget for 2014 Participants were asked to report their Salary Structure Increase Budget for 2014. 44 Companies Reported No Salary Structure Increase. Responses were
obtained from 170 companies and are summarized in the table below:
Survey Element # of Cos. Mean P25 Median P75
Salary Structure Increase for 2014 Incl Zeros 170 1.78% 0.00% 2.00% 2.50%
Salary Structure Increase for 2014 Excl Zeros 126 2.40% 2.00% 2.00% 3.00%
©2014 Empsight International, LLC - Confidential Page 15
Merit Increase Budget 2014 Merit Increase Budget for 2014 (Includes Zeros) Participating companies were asked to provide the percentage increase in merit budget planned for 2014 and to indicate if this value varied by level. The survey responses from 242 companies are summarized below. Executive / Management increases were slightly lower at average than professionals and support, partially due to more zero increases for that level.
Survey Element # of Cos. Mean P25 Median P75
Overall Merit Budget Increase for 2014 242 2.74% 2.50% 3.00% 3.00%
Executive 196 2.64% 2.50% 3.00% 3.00%
Management 210 2.74% 2.50% 3.00% 3.00%
Professionals 210 2.74% 2.50% 3.00% 3.00%
Support / Non-Exempt 206 2.76% 2.50% 3.00% 3.00%
Merit Increase Budget for 2014 (No Zeros) The following table summarizes merit increase budgets overall and by level without zero increases. In this table mean increases for executives are slightly higher than other levels.
Survey Element # of Cos. Mean P25 Median P75
Overall Merit Budget Increase for 2014 235 2.82% 2.50% 3.00% 3.00%
Executive 178 2.91% 2.50% 3.00% 3.00%
Management 204 2.82% 2.50% 3.00% 3.00%
Professionals 204 2.82% 2.50% 3.00% 3.00%
Support / Non-Exempt 200 2.84% 2.50% 3.00% 3.00%
©2014 Empsight International, LLC - Confidential Page 16
Merit Increase Budget for 2014 by Industry The following table summarizes planned Merit Increase budgets for 2014 by Industry for 14 reportable industry classifications. As can be seen below, the Oil / Gas / Services, Chemical and Professional Services industries reported above par Merit Increases, while Consumer Products, Technology, and Pharmaceutical reported lower than average Merit Increase budgets for 2014.
Industry No. Cos. Avg Median
Excludes Zeros
Oil / Gas / Services 14 3.39% 3.32%
Chemical 9 3.23% 3.00%
Professional Services 6 3.00% 2.75%
Telecom / Cable / Satellite 8 2.94% 3.00%
Manufacturing 14 2.93% 3.00%
Electric & Gas Util 11 2.85% 3.00%
Financial Services 25 2.84% 3.00%
Media 9 2.78% 3.00%
Transportation / Trans Services 11 2.77% 3.00%
Retail / Wholesale 32 2.70% 3.00%
Insurance 35 2.67% 3.00%
Consumer Products 22 2.63% 3.00%
Pharmaceutical 9 2.39% 3.00%
Technology 9 2.37% 3.00%
©2014 Empsight International, LLC - Confidential Page 17
Merit Increase Budget for 2014 by Revenue Category The following table summarizes planned Merit Increase budgets for 2014 by revenue for 7 reportable categories. At Median, the reported Merit Increase value at 3.00% was undifferentiated by revenue category.
Revenue Category No. Cos. Avg Median
Excludes Zeros
A. 30 Billion and Above 46 2.71% 3.00%
B. 15-30 Billion 41 2.61% 3.00%
C. 10-15 Billion 24 2.83% 3.00%
D. 5-10 Billion 54 2.73% 3.00%
E. 3-5 Billion 30 2.78% 3.00%
F. 1-3 Billion 35 2.81% 3.00%
G. Less than 1 Billion 12 2.85% 3.00%
©2014 Empsight International, LLC - Confidential Page 18
Promotional Increase Budget Promotional Increase Budget for 2014 (Includes Zeros) Participating companies were asked to provide the percentage increase set aside for Promotional Increases in the 2014 budget. The survey responses from 110 companies are summarized below. The Median overall value was 0.50%.
Survey Element # of Cos. Mean P25 Median P75
Overall Promotional Budget Increase for 2014 110 0.38% 0.00% 0.50% 0.55%
Executive 90 0.35% 0.00% 0.23% 0.50%
Management 95 0.41% 0.00% 0.50% 0.58%
Professionals 95 0.44% 0.00% 0.50% 0.63%
Support / Non-Exempt 95 0.42% 0.00% 0.30% 0.58%
Promotional Increase Budget for 2014 (No Zeros) The following table summarizes promotional increase budgets overall and by level without zero increases. In this case, Median Values were 0.50% across all career levels.
Survey Element # of Cos. Mean P25 Median P75
Overall Promotional Budget Increase for 2014 69 0.61% 0.50% 0.50% 0.80%
Executive 47 0.68% 0.50% 0.50% 1.00%
Management 58 0.68% 0.50% 0.50% 1.00%
Professionals 58 0.72% 0.50% 0.50% 1.00%
Support / Non-Exempt 57 0.70% 0.50% 0.50% 1.00%
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Special Competitive Adjustment Budget Special Competitive Adjustment Budget for 2014 (Includes Zeros) Participating companies were asked to provide the percentage increase set aside for Special Adjustments in the 2014 budget. The survey responses from 114 companies are summarized below. The Median value across all levels was 0.00%.
Survey Element # of Cos. Mean P25 Median P75
Overall Promotional Budget Increase for 2014 114 0.23% 0.00% 0.00% 0.44%
Executive 98 0.18% 0.00% 0.00% 0.24%
Management 100 0.32% 0.00% 0.00% 0.39%
Professionals 100 0.21% 0.00% 0.00% 0.39%
Support / Non-Exempt 100 0.19% 0.00% 0.00% 0.25%
Special Competitive Adjustment Budget for 2014 (No Zeros) The following table summarizes special competitive adjustment budgets overall and by level without zero increases. In this case, Median Values across all levels was 0.50%.
Survey Element # of Cos. Mean P25 Median P75
Overall Promotional Budget Increase for 2014 44 0.59% 0.29% 0.50% 0.50%
Executive 31 0.56% 0.38% 0.50% 0.50%
Management 35 0.91% 0.34% 0.50% 0.50%
Professionals 34 0.62% 0.39% 0.50% 0.50%
Support / Non-Exempt 33 0.59% 0.25% 0.50% 0.50%
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Total Increase Budget Total Salary Increase Budget for 2014 (Includes Zeros) Participating companies were asked to provide the Total Percentage Salary Increase Budget (Merit plus Promotional plus Special) for 2014. The survey responses from 195 companies are summarized below. The Median value across all levels was 3.00%with an overall Mean was 3.04%
Survey Element # of Cos. Mean P25 Median P75
Overall Total Salary Budget Increase for 2014 208 3.04% 2.74% 3.00% 3.50%
Executive 167 2.90% 2.50% 3.00% 3.50%
Management 180 3.01% 2.75% 3.00% 3.50%
Professionals 180 3.03% 2.75% 3.00% 3.50%
Support / Non-Exempt 178 3.03% 2.75% 3.00% 3.50%
Total Salary Increase Budget for 2014 (No Zeros) The following table summarizes the Total Salary Increase Budget for 2014, overall and by level without zero increases. In this case, Median Values across all levels was 3.00%, with an overall Mean was 3.10%
Survey Element # of Cos. Mean P25 Median P75
Overall Total Increase Budget for 2014 No Zeros 204 3.10% 2.75% 3.00% 3.50%
Executive 157 3.08% 2.75% 3.00% 3.50%
Management 176 3.08% 2.79% 3.00% 3.50%
Professionals 176 3.10% 2.75% 3.00% 3.50%
Support / Non-Exempt 174 3.10% 2.80% 3.00% 3.50%
©2014 Empsight International, LLC - Confidential Page 21
US Salary Budget Increase Commentary Participants were invited to comment on their US Salary Budgets for 2014. Responses were obtained from 74 companies. Narrative comments were aggregated and classified. 51.3% of those answering this question indicated that Promotional and Special Increases were not in fact budgeted at all. In these cases such increases were dealt with ad hoc, outside of the planning cycle, and were charged back to the department or function involved, post facto. In the remaining cases, a single percentage amount was set aside to cover both Promotional and Special Increases, but discretion was allowed as to the allocation of weights between those two elements. These findings are consistent with similar responses in prior years.
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Forecasted Salary Structure Increase Budget for 2015 Participants were asked to forecast their Salary Structure Increase Budget for 2015.Responses were obtained from 120 companies and are summarized in the
table below:
Survey Element # of Cos. Mean P25 Median P75
Forecasted Salary Structure Increase for 2015 Incl Zeros 120 1.99% 1.50% 2.00% 3.00%
Forecasted Salary Structure Increase for 2015 Excl Zeros 97 2.47% 2.00% 2.00% 3.00%
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Forecasted Merit Increase Budget for 2015 Forecasted Merit Increase Budget for 2015 (Includes Zeros) Participating companies were asked to indicate the forecasted merit increase budget for 2015, if known. Responses were obtained from 188 companies and are summarized in the table below (which includes forecasted zero increases):
Survey Element # of Cos. Mean P25 Median P75
Overall Forecasted Merit Increase Budget for 2015 188 2.88% 2.80% 3.00% 3.00%
Executive 149 2.82% 2.80% 3.00% 3.00%
Management 161 2.86% 2.90% 3.00% 3.00%
Professionals 161 2.87% 2.90% 3.00% 3.00%
Support / Non-Exempt 159 2.88% 2.80% 3.00% 3.00%
Forecasted Merit Increase Budget for 2015 (Excludes Zeros) The following table summarizes forecasted merit increase budgets for 2015 (excluding zero increases).
Survey Element # of Cos. Mean P25 Median P75
Overall Forecasted Merit Increase Budget for 2015 186 2.91% 2.83% 3.00% 3.00%
Executive 142 2.96% 3.00% 3.00% 3.00%
Management 159 2.90% 3.00% 3.00% 3.00%
Professionals 159 2.90% 3.00% 3.00% 3.00%
Support / Non-Exempt 157 2.91% 2.90% 3.00% 3.00%
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Forecasted Promotional Increase Budget for 2015 Forecasted Promotional Increase Budget for 2015 (Includes Zeros) Participating companies were asked to forecast the Promotional Increase budget for 2015. The survey responses from 86 companies are summarized below. The Median overall value was 0.50%.
Survey Element # of Cos. Mean P25 Median P75
Overall Forecasted Promotional Budget Increase for 2015 86 0.39% 0.00% 0.50% 0.50%
Executive 66 0.37% 0.00% 0.35% 0.50%
Management 70 0.38% 0.00% 0.39% 0.50%
Professionals 70 0.38% 0.00% 0.39% 0.50%
Support / Non-Exempt 70 0.37% 0.00% 0.34% 0.50%
Forecasted Promotional Increase Budget for 2015 (No Zeros) The following table summarizes the promotional increase forecast overall and by level without zero increases. In this case, Median Values were 0.50% across all career levels.
Survey Element # of Cos. Mean P25 Median P75
Overall Forecasted Promotional Budget Increase for 2015 54 0.63% 0.50% 0.50% 1.00%
Executive 35 0.70% 0.50% 0.50% 1.00%
Management 40 0.66% 0.50% 0.50% 1.00%
Professionals 40 0.66% 0.50% 0.50% 1.00%
Support / Non-Exempt 40 0.65% 0.50% 0.50% 1.00%
©2014 Empsight International, LLC - Confidential Page 25
Forecasted Merit Increase Budgets for 2015 by Industry The following table summarizes forecasted Merit Increase budgets for 2015 by Industry for 14 reportable industry classifications. Chemical, Oil / Gas / Services and Telecom / Cable / Satellite had the highest average forecasted Merit Increase Budgets for 2015.
Industry No. Cos. Avg Median
Excludes Zeros
Chemical 9 3.33% 3.10%
Oil / Gas / Services 11 3.32% 3.00%
Telecom / Cable / Satellite 7 3.07% 3.00%
Manufacturing 13 3.00% 3.00%
Transportation / Trans Services 7 2.93% 3.00%
Consumer Products 16 2.90% 3.00%
Retail / Wholesale 24 2.88% 3.00%
Technology 6 2.83% 3.00%
Financial Services 22 2.82% 3.00%
Insurance 26 2.77% 3.00%
Media 9 2.72% 3.00%
Pharmaceutical 6 2.67% 3.00%
Electric & Gas Util 10 2.66% 3.00%
©2014 Empsight International, LLC - Confidential Page 26
Forecasted Merit Increase Budget for 2015 by Revenue The following table summarizes forecasted Merit Increase budgets for 2015 by Revenue Category for 7 reportable classifications.
Industry No. Cos. Avg Median
A. 30 Billion and Above 38 2.84% 3.00%
B. 15-30 Billion 30 2.65% 3.00%
C. 10-15 Billion 11 2.86% 3.00%
D. 5-10 Billion 43 2.93% 3.00%
E. 3-5 Billion 27 2.99% 3.00%
F. 1-3 Billion 31 2.99% 3.00%
G. Less than 1 Billion 9 2.94% 3.00%
©2014 Empsight International, LLC - Confidential Page 27
Forecasted Special Competitive Adjustment Budget for 2015 Forecasted Special Competitive Adjustment Budget for 2015 (Includes Zeros) Participating companies were asked to provide the percentage increase forecasted for Special Adjustments for 2015. The survey responses from 73 companies are summarized below. The Median value across all levels for non-zero awards was 0.50%.
Survey Element # of Cos. Mean P25 Median P75
Overall Forecasted Special Adjustment Budget 73 0.22% 0.00% 0.00% 0.50%
Executive 59 0.22% 0.00% 0.00% 0.50%
Management 60 0.21% 0.00% 0.00% 0.50%
Professionals 60 0.21% 0.00% 0.00% 0.50%
Support / Non-Exempt 60 0.19% 0.00% 0.00% 0.28%
Forecasted Special Competitive Adjustment Budget for 2015 (No Zeros) The following table summarizes forecasted special competitive adjustment budgets overall and by level without zero increases. In this case, Median Values across all levels was 0.50%.
Survey Element # of Cos. Mean P25 Median P75
Overall Forecasted Special Adjustment Budget 33 0.48% 0.25% 0.50% 0.50%
Executive 22 0.58% 0.31% 0.50% 0.50%
Management 24 0.52% 0.25% 0.50% 0.50%
Professionals 24 0.52% 0.25% 0.50% 0.50%
Support / Non-Exempt 23 0.49% 0.25% 0.50% 0.50%
©2014 Empsight International, LLC - Confidential Page 28
Forecasted Total Increase Budget for 2015 Forecasted Total Salary Increase Budget for 2015 (Includes Zeros) Participating companies were asked to provide the Forecasted Total Percentage Salary Increase Budget (Merit plus Promotional plus Special) for 2015. The survey responses from 164 companies are summarized below. The Median value across all levels was 3.00%.
Survey Element # of Cos. Mean P25 Median P75
Forecasted Total Salary Budget Increase for 2015 164 3.11% 3.00% 3.00% 3.50%
Executive 131 3.28% 3.00% 3.00% 3.50%
Management 143 3.09% 3.00% 3.00% 3.50%
Professionals 143 3.07% 3.00% 3.00% 3.50%
Support / Non-Exempt 141 3.07% 3.00% 3.00% 3.50%
Forecasted Total Salary Increase Budget for 2015 (No Zeros) The following table summarizes the Forecasted Total Salary Increase Budget for 2015, overall and by level without zero increases. In this case, Median Values across all levels was 3.00%.
Survey Element # of Cos. Mean P25 Median P75
Forecasted Total Increase Budget for 2015 No Zeros 161 3.17% 3.00% 3.00% 3.50%
Executive 126 3.41% 3.00% 3.00% 3.50%
Management 141 3.13% 3.00% 3.00% 3.50%
Professionals 140 3.14% 3.00% 3.00% 3.50%
Support / Non-Exempt 138 3.14% 3.00% 3.00% 3.50%
©2014 Empsight International, LLC - Confidential Page 29
Short Term Incentives Bonuses Paid in 2014 for 2013 Performance Participants were asked to indicate if bonuses paid in 2014 for 2013 performance, were Higher, Lower or About the Same, relative to bonuses paid in 2013 for 2012 performance. 205 Companies responded to this question. Over 74% indicated that bonus payouts were either the same or higher relative to payments in 2013. The Pie chart below summarizes the distribution of answers provided.
Responses # Responses % of Total
About The Same 87 42.4%
Higher 65 31.7%
Lower 53 25.9%
Total 205 100.0%
About The Same42.4%
Higher31.7%
Lower25.9%
Bonus Payout Variance 2014 vs 2013
©2014 Empsight International, LLC - Confidential Page 30
Long Term Incentive Targets Companies were asked to provide their Long Term Incentive Targets Overall / All Departments Combined, by Level and by functional area, if different. Responses were obtained from 78 companies and are summarized in the following tables: LTI Targets - Executives
Department # of Cos. Mean P25 Median P75
All Departments Combined 78 63.30% 35.00% 50.00% 75.00%
Law Department 24 62.21% 38.75% 61.00% 77.25%
Finance 21 53.26% 30.00% 50.00% 65.00%
Compliance Department 17 46.38% 30.00% 40.00% 55.00%
Accounting Department 21 50.45% 30.00% 50.00% 65.00%
Audit Department 21 48.18% 30.00% 50.00% 60.00%
Government Relations 16 52.85% 33.75% 48.00% 61.25%
Corporate Communications 20 46.04% 30.00% 41.00% 56.25%
Human Resources 24 54.73% 31.50% 49.00% 64.25%
Information Technology 23 47.71% 30.00% 43.00% 57.50%
©2014 Empsight International, LLC - Confidential Page 31
LTI Targets - Management
Department # of Cos. Mean P25 Median P75
All Departments Combined 70 22.84% 15.00% 21.15% 29.25%
Law Department 20 20.97% 14.50% 18.15% 25.00%
Finance 17 21.69% 15.00% 18.00% 25.00%
Compliance Department 17 20.34% 13.00% 18.00% 25.00%
Accounting Department 19 20.95% 13.00% 18.00% 25.00%
Audit Department 19 22.18% 15.00% 18.00% 25.00%
Government Relations 14 22.35% 13.50% 19.50% 25.00%
Corporate Communications 18 20.51% 14.25% 17.00% 25.00%
Human Resources 20 20.71% 13.00% 19.50% 25.00%
Information Technology 20 19.59% 12.56% 17.00% 24.25%
©2014 Empsight International, LLC - Confidential Page 32
LTI Targets - Professionals
Department # of Cos. Mean P25 Median P75
All Departments 29 14.48% 10.00% 15.00% 19.00%
Law Department 5 15.92% 10.00% 11.00% 18.00%
Finance 4 14.46% 9.06% 10.50% 15.90%
Compliance Department 3 17.20% 10.50% 11.00% 20.80%
Accounting Department 5 14.12% 10.00% 11.00% 14.00%
Audit Department 4 14.78% 9.38% 10.50% 15.90%
Government Relations 2 20.30% 15.15% 20.30% 25.45%
Corporate Communications 3 17.20% 10.50% 11.00% 20.80%
Human Resources 4 15.40% 10.00% 10.50% 15.90%
Information Technology 5 14.12% 10.00% 10.00% 11.00%
©2014 Empsight International, LLC - Confidential Page 33
2014 Stock Awards Commentary Participants were invited to comment on actions taken in relation to stock awards for 2014. Responses were obtained from 102 companies. Narrative comments were aggregated and classified. The majority of comments (33%) indicated that no major changes were planned for 2014. 4% of companies indicated that they plan to increase stock option award amounts. 5% of companies indicated that they plan to expand stock award eligibility. 5% indicated that they planned to reduce eligibility. 3% of companies indicated they plan to increase use of restricted shares.
©2014 Empsight International, LLC - Confidential Page 34
2014 Staffing Expectations Participants were asked to indicate whether they expected their company's workforce in 2014 will stay the same, increase, or decrease relative to 2013. 202 Companies responded to this question, over 90% indicated that they expected their workforce to the same or increase (up 5% from 85% last year). The Pie chart below summarizes the distribution of answers provided.
Responses # Responses % of Total
Stay the same 113 55.9%
Increase 68 33.7%
Decrease 21 10.4%
Total 202 100.0%
Stay the same55.9%
Increase33.7%
Decrease10.4%
2014 Staffing Expectations vs 2013
©2014 Empsight International, LLC - Confidential Page 35
Departmental Staffing Levels – US
Participants were asked to enter their US headcount for various identified departments. Responses were provided by 193 companies and are summarized
below:
Departmental Staffing – US
Department # of Cos. Mean P25 Median P75
All Departments 193 22456.3 3571.0 7421.0 19886.0
Law Department 169 100.9 22.0 44.0 103.0
Finance 152 361.9 59.3 142.5 405.3
Compliance 102 70.0 10.0 30.0 65.8
Accounting 108 152.9 43.0 87.5 148.3
Audit 109 30.3 10.0 18.0 35.0
Government Relations 91 26.9 3.5 7.0 17.0
Corporate Communications 126 37.3 6.0 16.0 40.0
Human Resources 159 192.6 50.0 102.0 221.0
Information Technology 158 840.5 154.5 400.5 815.0
Marketing 141 240.9 38.0 84.0 252.0
Social Media 34 5.8 2.0 4.0 8.8
©2014 Empsight International, LLC - Confidential Page 36
Law Department Staffing – US Participants were asked, in addition, to provide information on the staffing of the Law Department in the US, by defined levels. Information was collected
from 173 participants and this information is summarized below:
Law Department Staffing – US:
Level # of Cos. Mean P25 Median P75
Legal Executives 172 7.9 2.0 4.0 8.0
Attorneys 173 47.3 8.0 19.0 42.0
Paralegals 164 18.9 3.0 7.0 15.3
Administrative Support 163 27.1 4.0 7.0 15.5
©2014 Empsight International, LLC - Confidential Page 37
Issues of Concern Participants were asked to rank order (from 1 to 6) which issues of concern were of most concern to their organization from a compensation perspective.
Compensation Competitiveness and Employee Retention were the most highly ranked concerns (as they were last year). Responses from 189 companies are
summarized below.
Item Total Score * Overall Rank
Compensation Competitiveness 813 1
Employee Retention 805 2
Skills Shortages 696 3
Cost of Benefits 695 4
Employee Morale 567 5
Falling Unemployment 265 6
* Score is a weighted calculation. Items ranked first are valued higher than the following ranks, the score is the sum of all weighted rank counts.
©2014 Empsight International, LLC - Confidential Page 38
College / MBA Hire Practices Participants were asked to indicate their New College Hire Practices with respect to Average Hiring Rates and Average Sign-On Bonuses. Responses from 67
companies are summarized in the two tables below:
Average Hire Rate
Degree Classification # of Cos. Mean P25 Median P75
Bachelors – Non-Technical 67 $51,757 $45,000 $51,500 $55,500
Bachelors – Technical 64 $61,619 $55,000 $60,000 $65,000
Bachelors – Top Tier 34 $64,379 $55,000 $63,126 $70,000
MBA 46 $88,257 $75,000 $90,445 $102,750
Masters – Non MBA 42 $73,899 $65,000 $71,000 $83,750
Sign On Bonus Practices – for those paying Bonuses
Degree Classification # of Cos. Mean P25 Median P75
Bachelors – Non-Technical 20 $3,809 $2,875 $3,594 $5,000
Bachelors - Technical 27 $6,993 $2,750 $5,000 $5,000
Bachelors – Top Tier 16 $6,294 $4,750 $5,000 $5,425
MBA 26 $16,092 $8,917 $16,250 $24,250
Masters – Non MBA 18 $9,022 $5,000 $8,250 $10,000
©2014 Empsight International, LLC - Confidential Page 39
2014 College Hire Rates vs. 2013 Participants were asked to compare the hiring rates offered in 2014 versus the rates for the same period in 2013, using a scale of Higher, Lower or About the
Same. 143 companies provided responses to this question and the answers are summarized below:
Responses # Responses % of Total
About the same 110 76.9%
Higher 29 20.3%
Lower 4 2.8%
Total 143 100.0%
The average increase in new college hires was 5.4%.
Higher20.3%
About the Same76.9%
Lower2.8%
Hire Rates