Salary Survey

With the economy relatively healthy for most of 2000, publishing industry members received an average salary increase of 9% last year, up from an average increase of 7% in 1999, according to the results of PW's annual salary survey. As in the 1999 findings, the majority of respondents (51%) reported increases between 3% to 5.9%, but the industry average was pushed up by the fact that 16% of the respondents reported better than a 15% boost in pay in 2000. Twenty-nine percent of respondents had a salary increase between 6% and 14.9%, while only 4% got a raise of less than 3%. Salary figures consider base salary plus bonuses.

Management was still the place to be in 2000 to earn the most money in publishing. The single highest-paid position was that of president and CEO at a company with revenues of $100 million to $499.9 million; these execs pulled down an average $511,000. (Although PW received responses from 43 presidents/CEOs, none came from companies with sales over $500 million. Those salaries can be gauged by a look at the chart on p. 38).

The net average salary of those in management at the largest companies was $271,953, tops among all categories included in the survey. Senior management executives outearned their colleagues in other industry segments, particularly at companies with revenues over $500 million.

Outside of the management ranks, sales and marketing executives were the best paid in 2000. A v-p of sales and marketing at one of the largest companies had an average salary of $188,667 last year, while an editorial director or editor-in-chief at the same-sized company took in $155,000. The discrepancy was much smaller at companies with revenues of $100 million to $499.9 million; at those companies, sales v-ps earned $122,400 and the top editorial personnel made $121,884.

One finding suggested by the survey is that efforts undertaken by the industry to boost salaries for some of the lower-paid positions appear to be paying off. In particular, the average salary for publicity director increased by approximately 20% last year, as the industry was pressed to prevent publicists from fleeing to dot-com companies, which, at the time, were luring book p.r people with higher salaries and stock options. Marketing assistants and promotional manager also enjoyed healthy raises last year of 16% and 22%, respectively. Publishers were less successful in raising the salaries of editorial assistants, historically among the lowest paid in publishing. The average salary rose 5% last year, to just below $30,000.

Operational employees did not fare particularly well last year. Production managers and directors reported only a 0.5% raise in 2000 and the average raise among other jobs in the segment (i.e., distribution director, accounting manager, art director) was about 5%.

Prospects for employees in operations do not seem bright in 2001, either, as 40% of respondents in the sector said they expect to see layoffs or hiring freezes in their departments this year. The downsizing of back-office functions as the result of mergers or technological improvements are the most likely causes for the pessimistic job outlook from the operations staff. Only 16% of responding management personnel said they foresee a freeze or layoffs this year, while 33% expected to hire additional staff. Employees at the industry's largest companies were much more likely to feel that a hiring freeze or layoffs would occur than those at mid-size and small publishers.

Perhaps reflecting the differences in compensation and job security, 78% of those in management said they were very or extremely satisfied with their jobs, while only 48% of folks in operations had the same attitude.

The progress made toward closing the wage gap between men and women reported in last year's survey may have been an aberration. The average salary for men in 2000 was $130,345, compared to $72,093 for women. In addition to men occupying higher-paying management jobs and having more experience than women, another factor behind the large discrepancy is that men earned bigger bonuses and/or commissions than women; before the addition of bonuses and/or commissions, men's average salary was $94,929, compared to $64,533 for women.

Executive Compensation

The salary and bonuses of publishing industry executives were generally linked to the financial performances of the companies they head, PW's annual examination of executive compensation found.

Top management at Scholastic, for example, did very well in the fiscal year ended May 30, 2000, a year in which revenues rose 20% (even before Harry Potter and the Goblet of Fire hit store shelves). The strong financial performance resulted in large bonus increases for several company executives, including chairman Dick Robinson, whose bonus jumped 145% to $735,000, a total that exceeded his base salary by $35,000. Barbara Marcus, executive v-p, children's book publishing, enjoyed a 47% increase in her bonus for fiscal 2000, to $540,000, which helped lift her total compensation 31.5%, to $1,110,711. A $250,000 signing bonus contributed to an 84% (to $934,476) increase in the take-home pay of Jean Feiwel, publisher of children's books.

At the other end of the spectrum, for the second year in a row, cash compensation for Thomas Nelson president and CEO Sam Moore and executive v-p Joseph Moore declined due to a disappointing year. For the fiscal year ended March 31, 2000, Sam Moore's salary remained at $400,000, and he received no bonus (compared to a $128,000 bonus in fiscal 1999). Joe Moore received a $5,000 raise, although he also received no bonus; thus his total compensation fell 11.5%, to $270,000.

In a year in which Golden Books Family Entertainment lost $100 million on sales of $149 million, company chairman Dick Snyder's annual compensation fell 9.4%, to $1.7 million. The decline was due to a cut in his base salary from $950,000 to $765,384, while his bonus stayed at $950,000. A smaller bonus offset a salary increase for Golden's chief administrative officer, Philip Galanes, resulting in a 11.4% decline in take-home pay, to $684,423.

A disappointing year at Houghton Mifflin dropped chairman Nader Darehshori's 2000 total pay 16.4% to $805,098, due mainly to a decline in his bonus to $127,598 from $333,347 in 1999. Wendy Strothman, executive v-p and head of the trade and reference group, managed a 4.8% overall increase, to $394,605, on the strength of a 4.9% salary increase (to $281,005) and a 4.4% increase in her bonus (to $113,600). The trade and reference group had a solid 2000 with margins topping 10%.

With sales and earnings up 13% and 21%, respectively, Advanced Marketing Services president and CEO Michael Nicita received a 12.8% increase in his cash compensation, to $692,245, for the fiscal year ended March 31, 2001. Nicita had a base salary of $363,575 and a bonus of $328,670 last year and AMS's compensation committee has approved a raise in Nicita's base salary to $427,000 for the current fiscal year. Chairman Charles Tillinghast had a 4.1% gain in his salary and bonus, to $378,793.

After several years of no raises and bonuses, former Millbrook Press president and CEO Jeffrey Allen (he resigned in May) had a $30,000 bonus added to his base salary of $200,000 for the fiscal year ended July 31, 2000. In the year, sales rose 13.8%, to $21.4 million, and the company had net income of $1.1 million following a loss in the previous year. Jean Reynolds, executive v-p and publisher, also got her first raise in a couple of years; her salary went up $7,500, to $137,500, and she received a bonus of $7,000. In his first year with the company, Dick McCullough, v-p for trade sales and marketing, earned a salary of $125,000 and a $20,000 bonus.

Executives at John Wiley & Sons were rewarded for a strong fiscal 2000 with double-digit pay increases. President and CEO Will Pesce earned more than $1 million in fiscal 2000, with a salary of $483,846 and a $577,218 bonus; while Stephen Kippur, executive v-p, professional/trade division, had an 18.1% pay gain based on a salary of $324,692 and a bonus of $311,555.

At the large educational publishers, Harcourt Inc. president and COO Jim Levy received a 7.7% increase in cash compensation; his base salary was $675,000 and he got a $631,147 bonus. Harcourt president and co-CEO Brian Knez's bonus was doubled, to just over $1 million, boosting his 2000 compensation by 37.8%, to $1.8 million—the same as his fellow president and co-CEO Robert Smith. McGraw-Hill Cos. chairman Terry McGraw had a 13.6% increase in salary and bonus, to $2.3 million, while John Negroponte, executive v-p, global markets, received a 5% overall increase, to $840,000; both his salary and bonus went up $20,000, to $420,000. Total revenues at MHC rose 4.3% in 2000, and net income was up 10.9%.

Hungry Minds chairman John Kilcullen had an 11.8% increase in his pay package last year; his salary and bonus rose to $336,549 and $310,000, respectively. Sales at Hungry Minds were up 35% for the year ended September 30, 2000, although net income was off 3%. Since the end of fiscal 2000, Hungry Minds has been struggling and has now placed itself up for sale. William Barry joined Hungry Minds as president and COO in March 2000, and took home a total of $515,465 in the year. That figure included a salary of $176,544 (based on an annual salary of $300,000) and bonuses of $338,921, including a $165,705 signing bonus.

Randall White, chairman of Educational Development Corp., pulled down a salary of $110,00 and a got $20,000 bonus in fiscal 2001, the third straight year White has earned a total of $130,000. He holds 843,493 shares of EDC.

The highest paid bookseller in 2000 was Alan Kahn, COO of Barnes & Noble, who earned $960,000 in the year, a 20% increase over 1999. Kahn outearned his boss, chairman Len Riggio, who carried on his recent tradition of reducing his base salary—it dropped to $500,000 from $538,462 in 1999. Riggio, who owns 16.1 million B&N shares, had his bonus cut last year as well, to $300,000 from $450,000.

Greg Josefowicz earned a salary of $650,000 in 2000, his first full year as president and CEO of Borders Group. His employment contract calls for a minimum salary of $650,000 and a minimum annual bonus of $650,000 if certain goals are met. Chairman Bob DiRomualdo, who will retire at the end of the year, had a salary of $232,740 last year and has been granted 53,191 options in lieu of cash for consulting with Josefowicz on strategic and organizational issues for the remainder of his tenure at Borders.

A disappointing year at Books-A-Million was reflected in the total annual compensation for its top executives. BAM chairman and CEO Clyde Anderson's take-home pay fell 22.3%, due to a drop in his bonus from $262,500 to $65,000, while president Sandra Cochran's bonus fell $200,000, to $37,500, cutting her pay package by 25.7%.

On the e-retailing side, Barnesandnoble.com vice chairman and acting CEO Stephen Riggio received a $480,769 salary last year and no bonus, while Carl Rosendorf, who recently left the company, had a 21.1% decline in compensation; his $15,385 salary increase was offset by no bonus; Rosendorf got a $100,000 bonus in 1999.

PW's survey findings indicate that it is unlikely the average raise will reach 9% this year for all employees. A weak economy, soft book sales and the loss of leverage due to the bursting of the dot-com bubble (not one respondent expected to be at an Internet company in two years, compared to 6% who had such hopes in 1999) all indicate modest raises for 2001 for the industry's rank-and-file. How executives fare in the year will be interesting to measure.

The Publishing Payscale
Editorial: Company Revenues

Management: Company Revenues

Sales & Marketing: Company Revenues

Operations: Company Revenues

Selected Executive Salaries, 1999—2000