Category Archives: Compensation

Understanding Pay Differentials Among Health Professionals, Nonprofessionals, And Their Counterparts In Other Sectors

Source: Sherry A. Glied, Stephanie Ma and Ivanna Pearlstein, Health Affairs, Volume 34, Issue 6, June 2015
(subscription required)

From the abstract:
About half of the $2.1 trillion of US health services spending constitutes compensation to employees. We examined how the wages paid to health-sector employees compared to those paid to workers with similar qualifications in other sectors. Overall, we found that health care workers are paid only slightly more than workers elsewhere in the US economy, but the patterns are starkly different for nonprofessional and professional employees. Nonprofessional health care workers earn slightly less than their counterparts elsewhere in the economy. By contrast, the average nurse earns about 40 percent more than the median comparable worker in a different sector. The average physician earns about 50 percent more than a comparable worker in another sector of the economy, and this differential has increased sharply since 1993. Cost containment is likely to lead to reductions in the earnings of health care professionals, but it will also require using fewer or less skilled employees to produce a given service.

State and Local Government Workforce: 2015 Trends

Source: Center for State and Local Government Excellence, June 2015

From the summary:
This annual survey was conducted by SLGE, the International Public Management Association for Human Resources, and National Association of State Personnel Executives. Three hundred thirty-six (336) who are IPMA-HR and NASPE member human resource professionals took part in the survey, which was conducted in March and April 2015.
• 73 percent of respondents reported hiring employees in the past year.
• 54 percent reported hiring more than they did in 2012.
• 42 percent reported hiring contract or temporary workers.

At the same time, the pace of retirements quickened:
• 47 percent reported higher levels of retirement in 2013 than 2012.
• 13 percent reported employees had accelerated their retirement.

Changes to benefits continue:
• 53 percent reported their government made changes to health benefits for both active and retired employees.
• The most common changes were to shift more costs from the employer to employees (43 percent) and to institute wellness programs (24 percent).
• 29 percent reported their government altered retirement benefits over the last year.
• One-fifth required increased contributions to pensions from both current and new employees.

Looking ahead, the majority of respondents say their top concerns are:
• recruiting and retaining qualified personnel
• succession planning
• staff development
• competitive compensation packages
• retaining staff needed for core services
• employee morale
• employee engagement

Executive Compensation at Public and Private Colleges

Source: Chronicle of Higher Education, June 8, 2015

As of June 8, 2015, The Chronicle’s executive-compensation package has been updated with 2014 fiscal-year data on public-college presidents.

This update provides data on 238 chief executives at 220 public universities and systems in the United States. The median salary for presidents who served a full year is $428,250. Two presidents earned more than $1 million.

The most recent data on private-college presidents is from 2012, and includes information on 537 chief executives from 497 private nonprofit colleges. That year 36 presidents earned at least $1 million.

Using the Interactive Below
Below you can explore more presidential pay for public and private colleges since 2009. Select a president for additional details, including a breakdown of pay, institutional context, comparisons to similar institutions, and comparisons to other highly paid individuals at each institution.

For more details on how the data were gathered and analyzed, please refer to the methodology below.

The Changing Landscape of Golden Parachutes in a Say-on-Pay World

Source: Cody Nelson, Towers Watson, Executive Compensation Bulletin, May 28, 2015

From the summary:
So-called golden parachute payments — severance paid to executives affected by a change in control (CIC) — have come under renewed scrutiny at the same time as the pace of mergers and acquisitions (M&A) has surged over the past few years. Indeed, it’s not uncommon to see headlines focusing on outgoing CEOs’ golden parachute amounts following merger announcements. (For more on recent M&A trends, see “Key Executive Compensation Issues to Address in M&A Due Diligence,” Executive Pay Matters, February 25, 2015.)

In the 2011 golden parachute report prepared by Towers Watson’s Executive Compensation Resources (ECR) unit, we wondered how long golden parachutes would be with us, given the sharper focus on these arrangements with the advent of say-on-pay and say-on-parachute votes. (See “Golden Parachutes: Still With Us, But for How Long?” Executive Compensation Bulletin, November 1, 2011, for our last report.) But, while golden parachutes clearly have remained a key component of the executive pay landscape, many features have changed over the past several years to make these arrangements more shareholder-friendly. To provide an overview of current parachute practices, ECR reviewed CIC severance provisions at Fortune 500 companies to identify common features and recent trends and changes in these programs. Since companies that don’t offer CIC benefits or enhanced severance for an involuntary termination after a change in control were excluded from our analysis, our report focuses on the 340 Fortune 500 companies that offer severance upon a CIC event. …

A look at pay at the top, the bottom, and in between

Source: U.S. Bureau of Labor Statistics, Spotlight on Statistics, May 2015

Policymakers and the public have given much attention to economic inequality in the past few years. In general terms, inequality refers to the differences between people with the highest levels of wealth, income, or earnings and those with the lowest levels. How big are these differences? Have they grown over time? What other ways do these groups differ besides how much money they earn?

This Spotlight on Statistics looks at measures of earnings and wages. The Spotlight examines how these measures have changed over time and how they differ within a geographic area, industry, or occupation. The Spotlight also looks at how participation in employee benefit plans differs across wage categories. Finally, the Spotlight looks at how people in different income or earnings categories spend their time and their money.

D.C. Court Rejects Unilateral DOL Regulation of Home Care Workers in Sharply Worded Rebuke; DOL to Appeal

Source: David C. Lindsay, Bridget A. Blinn-Spears, and Matthew D. Duncan, Employee Relations Law Journal, Vol. 41 no. 1, Summer 2015
(subscription required)

From the abstract:
In this article, the authors discuss a recent D.C. District Court decision that vacated major provisions of the U.S. Department of Labor’s Home Care Final Rule, which would have prevented third-party employers from claiming the “companionship services” exemption to the Fair Labor Standards Act.

Senate Democratic Caucus Investigative Report on Executive Compensation at Illinois Higher Education Institutions

Source: Illinois State Senate’s Higher Education Sub-committee on Executive Compensation, 2015

From the summary:
Months of work by members of the media and the Illinois General Assembly have culminated in a special report detailing costly administrative practices at our state’s public universities and community colleges. The report brings to light growing administrative costs and generous executive compensation packages that have helped fuel tuition increases for Illinois students.

Same occupation, different pay: How wages vary

Source: Elka Torpey, U.S. Bureau of Labor Statistics, Office of Occupational Statistics and Employment Projections, Career Outlook, May 2015

…This article focuses on occupations with big differences in high- and low-earning workers, because people exploring careers like to know whether wages vary drastically within the same occupation. The first section describes wages and why they vary. The second section presents occupations with more than a $100,000 difference between the top- and bottom-earning 10 percent of workers. The third section suggests resources for learning more….

Broad-Based Wage Growth Is a Key Tool in the Fight Against Poverty

Source: Elise Gould, Alyssa Davis, and Will Kimball, Economic Policy Institute, Briefing Paper #399, May 20, 2015

From the Press release:
Broad-based wage growth could make a significant dent in the poverty rate, according to Broad-Based Wage Growth is a Key Tool in the Fight against Poverty, a new EPI study from senior economist Elise Gould and research assistants Alyssa Davis and Will Kimball. Despite the fact that wages and work-related income represent more than two-thirds of the total income of the bottom fifth of non-elderly American households, wage growth is often overlooked as a tool to fight poverty. Gould, Davis, and Kimball demonstrate how significant reductions in poverty could have occurred if wages for all workers had grown alongside either average wages or productivity since 1979….. The report uses various simulations to determine the effect of broad-based wage growth on poverty rates. If all workers’ wages had grown at the same rate as average wages since 1979, 4.5 million fewer people would be poor, including 1.7 million children. If all wages had grown at the same rate as productivity since 1979, these reductions would be even larger—7.1 million fewer people would be poor, including 2.7 million children. The largest impact broad-based wage growth would have on the poverty rate would occur if the economy were closer to full employment—combined with wages increasing alongside productivity growth, full employment would bring 11.2 million people out of poverty, including 4.4 million children. …..

Bosses Are Turning Poverty-Wage Workers Into ‘Managers’—and Barring Them From Overtime in the Process

Source: Michelle Chen, In These Times, May 18, 2015

If you’re one of the millions working in retail, some days you might work late at the register or do the store opening in hopes of clocking a little overtime pay. And you might hope to eventually rise to a higher-ranked managerial position. But did you know that promotion might just mean a smaller paycheck for the same job?

Welcome to the promotion from hell: Federal law says time-and-a-half is for ordinary laborers, and management is exempt from overtime provisions. So congratulations, as a shop “manager,” you no longer qualify for overtime—but still end up doing basically the same work for less….