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Fred Clayton was recently interviewed by IR Update, a publication of the National Investor Relations Institute (NIRI), on the rise in Investor Relations Officer compensation. Whether you are an investor relations executive or not, please read excerpts below for his interesting insight on this, and suggestion on how you might considerably increase your total pay while in your current position. (See full article and link below)
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The Upward Trajectory of IRO $alaries
IRO Salaries Continue to Rise. Learn What Companies Find Valuable
In Their IROs and What Leads to Higher Compensation.
By Tammy K. Dang
...Fred Clayton, chief executive officer of Berkhemer Clayton, retained executive search consultants, believes that in recent years, heightened regulatory requirements and shareholder activism have elevated the importance of IR to executive management and their boards.
“Today, more than ever, public companies need a first-rate IRO and team in place to fulfill this high-profit role, so the additional value may account for the increased pay,” he notes. Since IROs typically report to the CFO, Clayton sees a correlation in CFO and IR pay. Clayton cites Equilar’s 2016 CFO Pay Trends, which found that the median total compensation for the CFOs of S&P 500 companies increased by 17 percent from 2011 to 2015, which is just a little lower than the compensation growth for IROs tracked by NIRI-Korn Ferry.
...However, “do more with less, and do it better,” is the advice Clayton gives because as a “staff” function, IR has been, and always will be, resource constrained. Be clear on what management’s objectives are for IR to prioritize time and resources.
...“The more you know and contribute, the more you are worth,” Clayton says. “The annual bonus and long-term incentive awards are the key levers to increasing personal wealth, so if you are not already a vice president, learn what it will take to become one and develop a plan with your boss to get there.” Annual merit and cost-of-living raises to one's base salary does not translate into long-term riches.
“A 14 percent difference in annual base salary is one thing, but the larger issue is the disparity in annual bonus and stock awards which, according to the survey, is a difference between men and women of 30 percent and 25 percent, respectively,” Clayton notes.
The survey found that considerably more men than women came into IR from careers in the corporate finance and securities industries, which typically pay higher. According to Clayton, to attract these people, companies had to pay more – if not in salary, then in total compensation with regards to the annual bonus and equity components. In the survey, 42 percent of men hold a vice president title, whereas 33 percent of women reported senior director or director titles.
“In large companies, it is not unusual to find that a vice president and a director have the same salary range (minimum, midpoint, and maximum),” Clayton says, meaning the range for the IRO position is fixed, regardless of whether the position is occupied by a vice president or a director. However, vice presidents typically are eligible for a higher target annual bonus than directors, and qualify for more restricted stock units.
“More women need to be appointed vice president in their current positions,” Clayton believes. “I think this would go a long way toward changing the dynamic and leveling the playing field in terms of total compensation as compared to men.”
According to Clayton, compensation experts assert that, regardless of how exceptional the incumbent, each position in a company is worth only so much. That is why each has a designated salary range, including a maximum. IROs of mega-cap companies have excellent earning power, but over time IROs at smaller companies will find themselves running out of salary room. To achieve higher earning potential, they must aspire to, and qualify to be considered for, higher-paid positions in executive management, which applies to both men and women. Clayton pointed out that 70 percent of women surveyed viewed IR as their career destination, whereas 41 percent of men were undecided and thought IR might be a transitional role for them...
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