Survey Shows Mixed Compensation Picture

Turbulence in the information technology industry over the past year has been mirrored in a new survey of compensation trends at technology firms.

While executives have seen their annual bonuses become a shrinking part of their compensation, many rank-and-file employees have garnered healthy pay hikes this year, according to the survey.

The compensation survey, conducted by New York human resource consulting firm William M. Mercer Inc. for the Information Technology Association of America, found that many non-executive employees received moderate to strong increases in base pay and total cash compensation.

For example, median total cash compensation ? base salary plus annual incentives ? for application systems analysis and programming managers jumped from $91,800 in 2000 to $105,100 in 2001, including a $7,400 increase in base salary.

This suggested that shortages in specific IT jobs are continuing to drive pay upward for many positions.

"Despite an evaporating upside for some executives, many rank-and-file IT professionals are still seeing a fatter paycheck," said Harris Miller, president of Arlington, Va.-based ITAA. "We would expect that as investors realize the incredible values represented by the IT sector, stock prices will climb and stock options and other incentives will be the tide that once again lifts all boats."

The survey, released Oct. 10, reflects pay data from 69 firms representing 225 geographic locations and more than 56,000 IT employees. The survey examined base pay and incentive levels for 104 jobs in information technology, ranging from top executives to entry-level employees.

According to the survey, median total cash compensation for some executive positions declined from 2000 to 2001. For example, total compensation for chief executive officers declined from $409,600 to $350,000. However, their base salary cut represented only $2,600 of the total $59,600 drop in compensation.

While many rank-and-file employees have enjoyed pay increases, pay was relatively flat or slightly down for a number of common IT jobs. For example, senior project managers saw their median total cash compensation decline from $91,500 in 2000 to $90,000 this year, and senior software systems engineers saw a decline from $70,000 in 2000 to $69,100 in 2001.

"The technology industry is adapting its compensation practices to a changing, but still promising, business climate," said David Van De Voort, a Mercer consultant who leads the firm's Global IT Workforce Effectiveness group. "We're still seeing a general upward movement in pay and the use of incentive pay, but the tremendous upside pay potential of the past few years has been reined in to more closely link pay to actual company performance."