Salary Survey
Jim Milliot -- 7/3/00
Average raise slipped in 1999, though most still had a 3% to 6% increase
The average pay increase for publishing industry members was 7% in 1999, down from an 8% increase in 1998, according to the results of Publishers Weekly's annual salary survey. The majority of respondents, 52%, reported earning a salary increase of between 3% and 5.9% last year, while 15% received an increase between 6% and 9.9%. Another 17% reported a gain between 10% and 14.9% last year, while 12% did better than a 15% salary increase. Only 5% of respondents said that they had received less than a 3% raise in 1999.
The 1999 survey found that 55% of respondents made more than $70,000 in salary and bonuses last year, a figure that is no doubt influenced by the fact that the average number of years served in the industry by participants was nearly 16. Ten percent of respondents said they earned less than $40,000, a figure that closely corresponds to the 13% of respondents who had fewer than five years' experience in the industry.
As in previous surveys, executives in management positions at large companies earned the biggest paychecks in 1999. The net average for managers at houses with more than $100 million in revenues was $198,239, with presidents and CEOs presiding over the largest houses averaging total compensation of $428, 625. While the net average salary among the various editorial positions was $103,066 last year at the largest publishers, compared to an average $91,733 in sales and marketing, the heads of the sales and marketing units tended to earn more than their counterparts in editorial. The vice-president of sales and marketing at a company with revenues of more than $100 million earned $187,591, for example, while the editor-in-chief earned $146,404; the trend held true at medium-sized companies, where the top marketing executive made $123,167, compared to $99,226 for the editor-in-chief .
| The pattern of the lowest-paid person in publishing working in the editorial department at a small house held true in 1999, where the editorial assistant made an average of $24,283. Indeed, with only a few exceptions, salaries for each position in the survey increased along with the size of the company. The average compensation at companies with more than $100 million in revenues was $112,418, compared to an average salary of $92,861 at publishers with sales of between $10 million and $100 million. The average salary for employees at small publishers was $75,000. | The Publishing Payscale
Please refer to the graphs below (images will open in a new window): |
One of the highlights found in this year's survey was that women are closing the wage gap with men. Although men's total average compensation package of $113,180 was substantially higher than the $76,515 made by women, women out-earned men in several positions. The average salary for women publishers responding to the survey was $100,233, compared to $92,600 for men, while female promotion directors made $53,918, compared to $47,000 for men. In editorial, women senior and/or executive editors earned slightly more than men--$77,440 versus $76,088. Women editors outearned men, on average, $46,700 to $42,833, and women acquisition editors made $58,220 compared to $50,583 for men. The main difference between the total average salary for men and for women continues to be that more men are found in top-paying management spots, and that they have more experience.
In a finding that dovetails with the May 1 PW feature on publishers losing staff to Internet companies, 27% of survey participants said they had lost employees to dot-com companies. The exodus was the highest at the largest publishers, where 35% of respondents said they lost staff to Internet companies, especially among editorial personnel. The lure of Internet companies notwithstanding, 63% of respondents said they expect to be working for their current companies in two years, with only 6% anticipating a move to a dot-com. The specter of losing key personnel may be one reason the number of respondents who said they now receive stock options rose to 16% from 9% in 1998. Improved 401K retirement plans were cited by 18% of respondents.
While losing staff to Internet businesses played a role in employee turnover in 1999, the most important factor in a change in staff was a merger or company restructuring, especially at the largest companies, where 79% of respondents said their company had lost people because of mergers or staff cuts.
Executive Compensation
The company that awarded the largest increase in executive pay in 1999 was, surprisingly enough, Golden Books Family Entertainment, which was working its way through bankruptcy for most of the year and finished the year with a loss of $17 million, down from $102 million in 1998. Company chairman and CEO Dick Snyder earned a salary of $950,000 plus a $950,000 bonus, giving him a grand total of $1.9 million in take-home pay. Under a new three-year contract, Snyder's base salary will be $750,000 for the first two years and $850,000 for the third year, and he is eligible to receive a bonus of up to 200% of his annual salary. Snyder's chief lieutenants also did well last year, with Philip Galanes enjoying a 142% increase in salary and bonus in the year. Galanes, who served as the point man for much of the bankruptcy work, received a salary of $366,346 and a bonus of $406,346 in 1999.
While Snyder did not quite hit the $2-million mark, McGraw-Hill Cos. president and CEO Terry McGraw did, with the combination of a $825,000 salary and a $1,200,000 bonus, pushing McGraw, who became MHC chairman January 1, 2000, over $2 million. MHC's earnings rose 27% in the year. John Negroponte, MHC executive v-p for global markets, received a bonus in 1999 that was equal to his $400,000 salary.
Another executive who benefited from a good company performance as well as a promotion, Will Pesce of John Wiley & Sons, had a 47.2% increase in salary and bonus to $927,059 for the fiscal year ended April 30, 1999, when Wiley's earnings rose 48% (excluding an extraordinary gain in fiscal '98). Pesce, whose bonus of $478,444 was higher than his $448,615 base salary, was named president and CEO May 1, 1998. Stephen Kippur also took on additional responsibility in fiscal 1999, and his compensation rose over 10% to $538,592.
The promotion of Jim Levy to president and CEO of Harcourt, as well as being named a vice-president of the corporation, helped boost his total earnings to more than $1 million in fiscal 1999, with a salary of $662,019 and a bonus of $550,000. Brian Knez and his co-president and co-chief operating officer, Robert Smith, each earned a salary of $750,000 and a bonus of $555,750.
Longtime Books-A-Million secretary Sandra Cochran added the title of president during the last fiscal year, and her 62.2% increase in compensation took the form of a $237,500 bonus and a salary of $217,000. BAM CEO Clyde Anderson, who became chairman at the end of fiscal 2000, saw his compensation package jump 93.1%, due mainly to a $262,500 bonus; he received no bonus in fiscal 1999. BAM's earnings rose 31% last year.
Compensation for the heads of the country's two major chains continued to be a bit unusual. During fiscal 2000, Barnes & Noble chairman Len Riggio's compensation package fell to less than $1 million as he continued a recent tradition of voluntarily reducing his base salary. Riggio took home a salary of $538,462 and a bonus of $450,000 last year; he also owns more than 16 million shares of B&N stock. B&N COO Alan Kahn's salary increased by $84,615, to $584,615 in fiscal 2000, although his bonus remained at $300,000.
Stock options were the key for executives at Borders Group as company chairman Bob DiRomualdo took his $474,533 salary and equally large bonus in stock options. DiRomualdo's total compensation slipped in the year as he cut back on his duties. Borders's vice-chairman Bruce Quinnell received no bonus last year, dropping his compensation by 46%.
Another chairman whose compensation fell in 1999 due to decreased involvement with the company was AMS's Charles Tillinghast. Tillinghast's salary was cut by about $30,000, to $195,000, although his bonus increased by about $10,000 to $168,650. AMS president Michael Nicita had a modest salary increase to $302,925, but enjoyed a 66.5% bonus increase to $310,500.
The chairmen of Scholastic and Houghton Mifflin each received an 8.2% increase in compensation last year. HM's Nader Darehshori had a salary of $630,000 in 1999, coupled with a $333,347 bonus. Dick Robinson of Scholastic received a $642,308 salary and a $298,935 bonus for the fiscal year ended May 30, 1999. Scholastic executive v-p Barbara Marcus earned a salary of $510,574 plus a $284,555 bonus.
The executive who took the largest reduction in pay last year was with Thomas Nelson. Nelson president and CEO Sam Moore had his compensation package nearly cut in half in the fiscal year ended April 30, 1999, mainly due to a decrease in his bonus to $128,000 from $610,000. Joseph Moore's better-than-25% pay cut was also due to a smaller bonus, which dropped to $40,000 from $170,00. During fiscal '99, Nelson's operating earnings fell 17.3%.
A reduction in IDG Books' chairman John Kilcullen's bonus from $422,600 to $289,000 was responsible for his smaller pay package, while a 7.8% increase in Brenda McLaughlin's base salary to $178,000 offset a small decline in her bonus in fiscal 1999.
Executive pay for two of the smallest companies included by PW remained even in the last year. EDC chairman and president Randall White had a $110,000 salary and $20,000 bonus the last two years. Jeffrey Conrad, president and CEO of Millbrook, had a base salary of $200,000 in fiscal 1998 and 1999 and no bonus, while senior v-p and publisher Jean Reynolds's salary stayed at $130,000. White holds 801,000 EDC shares, while Conrad's and Reynolds's stakes in Millbrook are much smaller, at 117,500 shares and 68,000 shares, respectively.
At the one audio operation represented on the chart, MediaBay president and CEO Michael Herrick received a salary of $125,000 the last two years, while ABC president Jesse Faber had a salary of $158,169 and a $45,000 bonus. Herrick, however, has more than one million stock options.
Internet Dollars
The biggest pay day of the executives tracked by PW was for Amazon.com's new president and chief operating officer, J Galli. Although Galli received only a $102,266 salary last year, he also took home a $2.9-million signing bonus as part of a total signing bonus of $7.9 million, payable over three years. Other new hires in the year received similar deals. Warren Jenson, senior v-p and chief financial officer, is entitled to a signing bonus of $7.5 million payable over five years, while Jeff Wilke, v-p and general manager of operations, was given a signing bonus of $2 million payable over four years. Amazon chairman Jeff Bezos's salary remained at $81,840, but the e-retailer founder owns more than 117 million Amazon shares.
The big winner at Barnesandnoble. com was former CEO Jonathan Bulkeley, who received $10.9 million in exchange for his stock options (News, April 17). Among those still working at b&n.com, v-p for merchandising Brenda Marsh received a 77% salary hike, to $250,000, while senior v-p Carl Rosendorf earned a salary of $300,000 and a $100,000 bonus. Rosendorf also has more than 431,000 stock options, and Marsh has 86,250. Len Riggio controls more than seven million shares of b&n. com stock,
Fatbrain.com president Dennis Capovilla and executive v-p for product development Kim Orumchian both received raises last year, and their new employment contracts call for Capovilla's base salary to rise to $225,000 this year and Orumchian's salary to go to $185,000. The more interesting twist is that Fatbrain has loaned Capovilla $300,000 and Orumchian $150,000 and granted them the right to acquire up to 1% each of MightyWords, following the close of that subsidiary's first round of financing.
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