Salary Survey

Despite efforts by publishing companies to cut costs in 2002 to cope with sluggish sales in many sectors of the industry, the average salary increase rose 5.1% last year, only marginally below the 5.4% gain reported in 2001. The overwhelming majority of respondents to PW's annual salary survey, nearly 66%, reported that they received a pay raise between 3% to 5.9% last year, compared to 61% in 2001. The survey did find, however, that the number of respondents who received a salary increase of better than 6% last year fell to 20% from 28% in 2001, and the percentage of respondents who received less than a 3% pay boost increased to 14% from 11%

Industry members who left for new jobs or were promoted within their company fared considerably better in receiving a meaningful salary increase than those who remained in the same position. Approximately 93% of people who made a job move in 2002 received a pay increase of 6% or better. The average earnings gain for people who took new positions was 15%; 14% of respondents said they had moved into new jobs last year.

The trends and attitudes reflected in the 2002 survey were largely consistent with the findings in the 2001 report. A new question asking industry members if they would recommend publishing as a career to a recent graduate found that most people—62%—would, but with some reservations. Twenty-three percent said they would enthusiastically endorse publishing as a career, while 15% said they probably or definitely would not recommend publishing as a career. Men were less bullish on publishing as a profession than women, with 18% of men saying they would not advise someone to pursue a publishing career, compared to 13% of women.

The longer a person remains in the industry, the more he or she is not likely to recommend publishing as a career. Only 8% of those in publishing for less than five years said they would advise against joining the profession, while 16% of those with five to 10 years in publishing would counsel against moving into the industry, and 17% of veterans with more than 10 years service would recommend against joining the publishing corp.

People's views of publishing as a career appear tied in part to how they see the chances for advancement. Sixty-one percent of people who have been in publishing for more than 10 years said they see little chance for a promotion, while 62% of industry members with less than five years experience believe they will advance. Overall, more than half—56%—of respondents said they believe they have no chance for a promotion from their current jobs. The trend was particularly noticeable at smaller publishing companies, where 71% of respondents said they have little chance for advancement. Broken down by jobs, people in sales (51%) and editorial (50%) were more confident of moving ahead than those in operations (31%) and management (21%).

The lack of movement within publishing houses is also seen in the 48% of respondents who said that two years from now, they expect to be in the same position. Only 19% predicted that they would be in a higher position at their current company. While most people said they expected to remain in publishing, nearly 10% said they were unsure what the future holds.

People in publishing can't count on new positions opening up. Only 21% of respondents said they believed their company planned to add jobs, down from 25% in 2001. And 29% expect that their company will institute a hiring freeze or layoffs this year, up from the 27% last year.

On the issue of job security, 73% of respondents said they felt somewhat secure (52%) or very secure (21%) about holding on to their positions, while 27% felt somewhat insecure (21%) or very insecure (6%) about their employment situation. People working in operations were the most worried about keeping their jobs, particularly at the largest publishers, while those in management were the most secure about their positions.

As has been true since our salary survey began, management is also where the biggest paychecks are. In companies of every size, the best-paid employee was the president/CEO, with the heads of companies with revenue in the $100 million to $499 million range pulling down the highest compensation in this year's survey, at $555,000; colleagues at companies with sales over $500 million took home an average of $525,000. While editorial positions had a higher overall average on the earnings scale than marketing, the top marketing position (v-p of sales) at the largest publishers took home more than the top editor.

In another truism, men outearned women in most publishing jobs—men earned an average of $101,237, compared to $77,475 for women in 2002. The smallest pay gap was in editorial, where men had an average salary of $90,082, compared to $82,064 for women. The average pay for a man in a management position was $176,422 last year, compared to $144,731 for women. In sales and marketing, men earned an average of $93,439, compared to $74,163 for women.

Executive Compensation

Compensation for Advanced Marketing Services president and CEO Michael Nicita fell 14.4% in the fiscal year ended March 31, 2002, as his bonus dropped 50%, to $163,500, offsetting a 18% salary increase to $429,029. The bonus for Kevan Lyon, executive v-p for merchandising, was also 50% less in fiscal '02 compared to fiscal 2001, falling to $62,500. Her salary rose 14%, to $223,769.

A promotion to CEO and lower losses resulted in a 74.8% jump in compensation for Barnes & Noble.com's Marie Toulantis, to $810,577. Her salary rose 38.7%, to $485,577, and her bonus soared 186%, to $325,000. Daniel Blackman, v-p and general manager for books/music/video, had his salary raised 16%, to $210,000, and his bonus was boosted 234%, to $87,625.

Over at parent company Barnes & Noble, Steve Riggio earned $790,385 in his first year as CEO—a salary of $627,885 and a $162,500 bonus. Riggio's new employment contract runs into 2005 and calls for a base salary of $650,000 plus bonuses. Mitch Klipper, COO, earned a smaller bonus in 2002 than in 2001, but a salary raise of $98,077 was high enough to increase his take-home pay by 3.2%. Publishing group head Alan Kahn saw his salary fall 16% last year, to $503,846, and his bonus was cut by $90,000, to $180,000.

Lower bonuses were behind the decline in total compensation for the top officers at Borders Group last year. Chairman Greg Josefowicz's fell 32.5%, to $319,500, offsetting a 5% salary hike, to $709,346. Borders division president Tami Heim's bonus dropped 47.2%, to $70,000, while her salary rose 5.7%, to $279,712, resulting in a 11.9% decline in take-home pay.

An operating loss last year meant no bonuses for the top executives at Books-A-Million. Although chairman Clyde Anderson and president Sandra Cochran each received a $10,000 raise last year, the lack of a bonus dropped their salaries by nearly 40% last year. In 2001, Anderson received a $280,000 bonus and Cochran got a $231,000 bonus.

An improved operating performance for the fiscal year ended October 31, helped lift total compensation for Courier Corp. chairman James Conway and senior v-p George Nichols. Conway's salary went up 5.8%, to $360,000 and his bonus rose 37.1%, to $300,000. Nichols's base pay went up 3.6%, to $300,000 and his bonus jumped 26.6%, to $337,500.

After several years of no pay raise, Randall White, chairman of Educational Development Corp., received a 16.7% salary increase for the fiscal year ended February 28, 2003, plus his usual bonus of $20,000. EDC had a record year in fiscal '03.

Hans Gieskes, who took over as chairman of Houghton Mifflin in June 2002 (and resigned last week), took home more than $1 million last year, thanks in large part to a $600,000 bonus he received for his part in arranging the sale of HM from Vivendi to an investment group. Gieskes's base salary was $301,358 last year. Other HM executives who received bonuses in connection with the sale were Sylvia Metayer, executive v-p and COO and David Caron, senior v-p and CFO—each received a $200,000 bonus. June Smith, executive v-p for the college group earned a salary of $333,749 in 2002 and a $190,000 bonus.

Higher earnings meant higher pay in 2002 for Terry McGraw and Ken Vittor, chairman, and executive v-p and general counsel, respectively, at McGraw-Hill. McGraw's bonus jumped 77% last year, to $1,169,200, and his salary increased 5.2%, to $967,500. Vittor's bonus increased 84%, to $306,915, and his salary rose 4.1%, to $432,000.

Simon Boughton, v-p and publisher of Millbrook's Roaring Press imprint, was the highest paid employee at the publisher in the fiscal year ended July 31, 2002—he earned $150,000 plus a $25,000 bonus. Company president Dave Allen took a 5% cut in salary and got no bonus.

Peter Jovanovich, president of Pearson Education, was made an executive director of Pearson in 2002, helping placing him among the company's top-paid executives. Jovanovich's salary, bonus and "other" compensation resulted in total pay of $1,633,000. John Makinson's 116% increase in compensation last year reflected in part his promotion to chairman of the Penguin Group in 2002.

The fiscal year ended March 31, 2002, was a transitional period for Thomas Nelson, highlighted by the sale of its gift division. For the year, company president Sam Moore received his first bonus in three years—$180,000—and his salary increased $50,000, to $450,000. Executive v-p Lee Gessner received no bonus in the year, but did get an 18% raise. The company's proxy also listed a number of new corporate officers, including executive v-ps Mike Hyatt and Phil Stoner. Both got a salary of $175,000 in fiscal 2002; Hyatt received a $101,625 bonus and Stoner had a bonus of $89,600.

After a disappointing fiscal 2001 left Reader's Digest executives with no bonuses in that year, improving results for the publisher for the fiscal year ended June 30, 2002, meant a $725,000 bonus for company chairman Thomas O. Ryder, a payment that nearly doubled his total salary. Thomas Gardner's bonus was more modest, $160,000, but the bonus plus a 15% salary hike raised Gardner's take-home pay by 60% in fiscal '02.

Bonuses were lower at Scholastic for the year ended May 31, 2002, dropping total pay for chairman Dick Robinson by 2.8%, and by 1.1% for Barbara Marcus, president of the children's book group. Robinson's salary rose 6.8%, to $781,731, and Marcus's base pay increased 5.4%, to $663,407.

A strong year at John Wiley for the fiscal year ended April 30, 2002, meant significantly larger bonuses for president and CEO Will Pesce and Stephen Kippur, executive v-p and president for the professional/trade group. Pesce's bonus jumped 115%, to $944,190 and his salary rose 15.8%, to $632,692. Kippur's bonus soared 373%, to $331,339 and his salary increased 4.7%, to $362,115.

The Publishing Payscale

Selected Executive Salaries, 2001—2002