The chief executive of the average Washington area high-technology company is taking home an annual paycheck of nearly $200,000 in salary and bonus as local high-tech firms fight to lure and retain effective and creative managers, according to a new survey.
"High-technology companies compete vigorously for the very best managerial and technical talent -- highly skilled and innovative individuals who will keep the firms on the leading edge of their fast-changing industries," said Michael A. Burniston, a consultant at Towers, Perrin, Forster & Crosby, a New York-based management consulting firm specializing in compensation issues that recently conducted the survey of executives of nearly six dozen Washington area high-technology companies and local divisions of national technology firms.
Nevertheless, top executives in the Washington area, like their counterparts elsewhere, are seeing smaller raises each year. The flattening-out reflects a nationwide trend attributed to low inflation rates and uncertain economic conditions.
The TPF&C survey said area high-tech executives got average salary increases of 5.8 percent this year, compared to 7 percent increases in 1986 and 1985. In all three years, increases for nonmanagement employes were slightly lower than those given management. Next year, increases are projected to be even lower, about 5 percent.
The TPF&C survey found the average annual salary of chief executive officers at Washington area high-tech companies is $151,300, and their average annual bonus is $48,100.
By comparison, a recent survey of national companies by another consulting firm, Sibson & Co. Inc., found that for companies of all kinds with an average of $50 million in annual sales -- larger than most local high-tech companies -- executives in the 50th percentile in the survey made $162,000 in salary and $34,000 in bonus.
CEOs at local high-tech companies with less than 225 employes had an average, or mean, base salary of $108,600, plus an average $24,500 bonus. But those at firms with more than 1,000 employes made more than twice as much -- an average salary of $211,800 and an average bonus of $76,100.
When TPF&C ranked the companies by revenue, the results were similar. CEOs at companies with less than $18 million in revenue had salaries averaging $116,400, plus bonuses averaging $24,200. For firms with revenue above $150 million, the CEO salary averaged $218,300 and the bonus averaged $76,100.
The six-figure salaries don't stop at the top. Executives a few rungs down the corporate ladder at local high-tech concerns are making $100,000 or more in salary and bonus each year, the survey found. Chief operating officers make an average of $130,400 a year in salary and $33,800 in bonus, according to the survey, while vice presidents with responsibility for company profit-center businesses are being paid an average salary of $100,600 and a mean bonus of $24,500.
The survey questionnaire was sent to 200 high-tech companies in July, and 71 companies responded, although not all answered every question. About half of the firms responding were technical or professional services companies, and 73 percent of the respondents said they get more than half of their revenue from government contracts.
Local high-tech CEOs have a healthy number of executive perks, according to the survey. The most common seem to be professional club and association memberships, parking, supplemental life insurance, supplemental medical coverage and cars or car allowances.
Most of the executives responding to the survey (84 percent) said they have annual bonus and incentive programs. While the majority of the bonus and incentive programs were solely for executives and management, 22 percent of the firms had bonuses and incentive programs for all employes.
Half of the respondents have a formal plan, such as employe stock ownership or discount stock purchase plans, for all employes. Half of responding organizations have one or more long-term incentive plans, but the plans usually are only for top management.
TPF&C sorted the companies into four high-tech industry sectors, with CEOs in communications companies getting the highest average salary, $184,300. The 10 communications firms participating in the survey included Contel-Federal Systems, Intelsat, Media General Cable of Fairfax and Telenet Communications Co.
CEOs of high-tech manufacturing firms were next, with average salaries of $155,200. The 11 participants included Aiken Advanced Systems Inc., Atlantic Research Corp., Bendix Aerospace Sector, Fusion Systems Corp., Radiation Systems Inc. and Weinschel Engineering Co.
The 37 technical service and professional service companies included The BDM Corp., Betac Corp., Essex Corp., Logicon Inc., Systems and Applied Sciences Corp. and Vitro Corp.
Seven computer and component companies participated, including Automata Inc., Digital Systems Corp., Honeywell Federal Systems Inc. and Star Technologies Inc.