Executive compensation and leadership consulting firm Pearl Meyer recently published survey results that indicate a slowing in 2024 of the outsized base salary increases noted last year, while still remaining above longer-term historical norms.
The annual Looking Ahead to Executive Pay Practices survey indicates roughly two-thirds of respondents are expecting somewhat similar year-over-year increases. However, there are also indications of slowing expectations for wage growth. Just 9% of respondents are forecasting higher percentage raises versus 40% last year. Twenty-four percent are expecting lower levels in 2024, versus just 6% in the last survey.
“Salaries remain above historical norms, but it is a different landscape from this time last year,” said Managing Director Bill Reilly, who developed the survey. “Things are certainly cooling off, consistent with declining overall inflation levels, but the outlook is not gloomy. Ninety-seven percent of respondents expect increases in 2024 for their broad-based workforce and 86% expect raises for senior executives. Additionally, nearly 20% of respondents increased or plan to increase competitive positioning for one or more pay components, reflecting ongoing strong demand for key talent within the current environment.”
According to the survey, at the 50th percentile the expected increase for broad-based employees is 3.7%, down from the 4% expected last year. For senior executives—CEOs and their direct reports—the number drops to 3.5%, also down from 4%.
“Data provides an important context for any company’s compensation programs, but it should not be the driver,” said Reilly. “It is a helpful point-in-time reference but cannot accurately account for your organization’s unique circumstances. Examine the data and understand your position relative to trends, but always base compensation decisions on your talent management strategy and business goals.”
Pearl Meyer’s “Looking Ahead to Executive Pay Practices” is…
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