Chief Executive Boards Blog: Business Owners Report 2010 Salary Plans

Many business owners are very interested in what others are doing about salary actions in 2010. We polled members of Chief Executive Boards International to find out what they're planning for salary increases or adjustments in 2010. Here's what they had to say.

In 2009, 47% of those surveyed froze salaries. 40% reduced salaries, either across the board or selectively. Only 13% increased salaries.

In 2009, 40% of those surveyed reduced hours, of which 68% have returned to standard hours by now.

For 2010, 30% intend to continue their salary freeze, while 23% intend to increase most salaries. Those increases will be in the range of 2%-4% for 41% of companies.

Besides these answers to survey questions, these business owners had the following additional comments on their 2010 compensation plans:

As a bonus we gave a week off with pay in lieu of cash
We have a common review and compensation adjustment period with all occurring in the month of September. So we are not planning any salary adjustments come September 2010 lasting thru September 2011. However, we do plan in September (or before) giving bonuses in the 1-4% range in lieu of permanent salary increases. This will give us flexibility to share profitability of 2010, but not commit to permanent increases thru most/all of 2011. We may have the same plan in mid-2011 depending on what the economy does. If/as hiring and employment heats up in IT, we can always make the planned bonuses & salary increases.
Incentive compensation
Instead of salary increases on hourly employees, the plan is to institute quarterly incentive bonuses based on a combination of company and individual performance.
It varies. Sometimes time off or other small incentives.
Performance bonuses and profit sharing this year to offset employee's wage freezes in 2009
Productivity incentive based on group performance. The measure is in good pounds shipped per man hour on the clock. There is a threshold that has to be met and then a rapid rise in bonus thereafter.
The breadth of salary increases will be related to sustained improvement in profitably over one or two quarters.
Until our market gets consistent, we are trying to reward performance with one time rewards such as tickets to events, some time off, gift cards, etc. so that we don't lock into fixed increased expenses.
We pay bonuses based on performance goals relating directly with the success of the firm.
We've always offered a combination of Bonuses and raises.
We have been fortunate and have not had much of an impact on our revenues and profits with the economy. Therefore we were able to increase salaries in 2009 and anticipate increasing them again in 2010.
It has been a "Seller's Market" for many years and now it is a "Buyer's Market". Most people I know today are just happy to have a job.
Salary was reduced 10% for 2009. 5% was given back 12/15, and the remaining 5% will be given by June/ 2010. So, the entire salary staff will be back to their 2009 salary, for the balance of 2010. Then we'll review for 2011.
Our employees' compensation has been frozen and some lowered, including the owners. Exception is two employees whose level of responsibility has changed dramatically due to staffing cut backs. We have adjusted their comp upwards.
As of March 1, we have simply reinstated some salaries to the previous levels. No increases have been offered above that existing level. In 2009 we also went to a 4 day work week and have since gone back to 5 days as we have seen volumes and orders significantly increase. Executive compensation remains at a reduced level until further notice.
Decreased employer contribution to HSA but also reduced deductible.
We are also making selective staff reductions (based on productivity measures) to free up more money in the salary pool
In terms of hours, we are a contract manufacturing operation so we reduce and expand hours depending on demand