Eighth Annual MD&DI Salary Survey
Introduction |
Salary, Raises, and Compensation
The Employee |
The Company
Conclusion |
Survey Methodology
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Salary Estimator
SALARY, RAISES, AND COMPENSATION
In a year when the consumer price index (CPI) rose by only 2.8% from March 1995 to March 1996, it didn't figure that many industry professionals would chalk up raises in the double digits. Nevertheless, salaries in the U.S. device industry rose a respectable 6.2% during the past year, once again outperforming inflation and keeping industry professionals nearly 3.5% ahead of the CPI. Following are the details revealed by MD&DI's survey for the critical areas of salary, raises, benefits, and total compensation.
Salary. As reported in this year's MD&DI survey of industry professionals, the average salary in the U.S. device industry grew last year to $63,800, slightly ahead of the previous year's industry average of $63,500. As might be expected, general and corporate managers continued to bring down the largest salaries last year, reporting an average of $92,200. The category of marketing professionals remained in second position among the categories surveyed, with an average salary of $68,300.
One of the bright spots in this year's report is the average salary of R&D professionals, which jumped to $67,600, boosting the category to third place among those surveyed. Falling to fourth place was the category of regulatory and legal affairs professionals, which reported average annual salaries of $65,700, the same as in last year's survey. Another category whose reports changed its ranking was that of production and manufacturing personnel, whose members earned an average $60,900, lifting the group from sixth to fifth place.
This year's survey results offer few surprises when viewed from the perspective of respondents' level of responsibility. For instance, CEOs and presidents continued to see salary gains, earning an average of $100,800 last year. Vice presidents and directors reported average salaries of $86,700, while the average salaries of department heads and supervisors came in at $62,500. Engineers and scientists brought up the rear, reporting average salaries of $51,700.
Raises. Respondents to MD&DI's survey reported that they had received modest increases in their salaries during the past year. The mean increase reported for this year's survey was 6.2%, slightly lower than last year's mean of 6.4%, but the same as was reported for MD&DI's survey in 1994. Overall, more than half of respondents (58%) reported receiving increases in the range of 2.5 to 7.4%. At the high end, 15% of respondents received raises of 10% or more, and 5% of respondents received raises in the range from 7.5 to 9.9%. Only 4% of all respondents reported that their most recent raises amounted to less than 2.5% of their previous salary.
Among the job function categories covered by MD&DI's survey, general and corporate managers reported the greatest gains during the past year, with an average raise of 9.7%. R&D personnel also scored well, managing to bring in an average increase of 7.2% over their previous year's earnings. Other categories were some distance back in the pack, with marketing (6.5%) and regulatory and legal affairs (6.0%) personnel occupying the middle range. Lagging behind were QA/QC personnel, who reported average increases of just 5.5%.
By level of responsibility, CEOs and presidents once again logged the greatest increases during the past year, receiving average increases of 11.5%. The level of vice presidents and directors saw average raises of 7.4%, while department heads and supervisors reported receiving increases of 5.8%, and engineers and scientists earned raises of 5.6%.
Access to Benefits. Although salary constitutes the largest portion of the total compensation package for most device industry employees--making up 69% according to this year's survey--the benefits that employees receive are also significant. Employees are just as sensitive to changes in their benefits as they are to changes in their salaries, and woe to the device manufacturer that disappoints employee expectations in this regard.
However, employee expectations regarding benefits can vary widely. Commenting on the least rewarding aspects of her job, for instance, one respondent wrote "low pay increase, no in-house day-care program," suggesting that the latter would be considered an important benefit for the employer to offer. Specialized benefits such as these have not been captured by name in this year's salary survey, but may appear under the heading of "other" benefits that contribute to an employee's total compensation.
Insurance benefits make up by far the most frequently offered nonsalary items in an employee's compensation package. This year, 86% of respondents said that health insurance was a part of their package, 74% received life insurance, 71% were given dental insurance, and 64% disability insurance.
Access to stock options was offered to 37% of employees this year, while profit sharing was enjoyed by 25% of surveyed professionals. Among respondents to this year's survey, 43% reported that contributions to a pension were a part of their compensation package.
Bonuses were received by 52% of respondents to this year's survey, and incentive pay was received by 10% of professionals. Access to educational benefits was enjoyed by 44% of this year's respondents.
The spread of these benefits varies greatly among the various categories included in this year's MD&DI survey. For instance, bonuses were offered to 65% of employees in the categories of marketing and production and manufacturing, and to 61% of general and corporate managers, but to only 36% of QA/QC personnel. Incentive pay was received by 18% of marketing professionals, 13% of production and manufacturing personnel, and 12% of general and corporate managers and product design engineers, but by only 2% of regulatory and legal affairs staff.
Access to stock options, once a perquisite exclusive to the executive suite, was spread with remarkable evenness in this year's survey responses. Among the seven job categories surveyed, only one (regulatory and legal affairs, at 52%) varied by more than four points from the industry average of 37%. Employee participation in company profit-sharing plans was also fairly even among the job categories; marketing personnel topped the heap in this area, with 30%, while regulatory and legal affairs brought up the rear, with 18%. Again, none of the other job categories varied by more than four points from the industry average of 25%.
On the other hand, the distribution of pension participation among the surveyed job categories was quite uneven. Production and manufacturing personnel led the way at 55%, followed closely by QA/QC professionals and regulatory and legal affairs staff at 53%. None of the other categories topped 36% participation in pension plans, and among general and corporate managers only 29% counted a pension as part of their compensation.
Looking at the same figures against the backdrop of employee levels of responsibility, bonuses and stock options continue to be the benefits most likely to be given to vice presidents and directors; 71% of employees at this level reported receiving bonuses last year, and 50% received stock options. Notably, in this area vice presidents and directors topped even CEOs and presidents, only 51% of whom received bonuses, and only 32% of whom received stock options.
Department heads and supervisors are the employees most likely to receive educational benefits and pensions as part of their compensation. Educational benefits were received by 52% of respondents at this level, while pensions were received by 51%; in both cases they were ahead of the industry averages of 44 and 43%, respectively.
Profit sharing is more likely to be part of the compensation of CEOs and presidents than of any other level of employee. This year, 38% of respondents at this level reported participating in a profit sharing plan, compared with the industry average of 25%. No other level of responsibility came close in this year's survey.
One benefit not captured in the cross-tabulations of MD&DI's survey--but clearly regarded as a benefit by many respondents--is travel. In response to open-ended questions on the survey, many respondents listed travel as the most rewarding aspect of their jobs. In two cases the responses were more specific, citing "international travel"--a reminder that the device industry is increasingly a globalized concern, wherever its employees may be located.
Total Compensation. For most categories of device professionals, total compensation--which includes such potentially lucrative items as bonuses, stock options, profit sharing, and incentive pay--also continued to grow last year. Total compensation for device industry professionals rose to $83,400 last year, slightly more than a 2.5% increase over the $81,400 figure reported in last year's survey. Even so, MD&DI's survey reveals that the bonuses awarded by device companies during the past year were a pale reflection of previous years' awards. Among the 53% of industry professionals who received bonuses, the average amount was $7890, down from the industry average of $9600 reported in last year's survey.
Topping the bonus list were general and corporate managers, who received average bonuses amounting to $22,680 last year. Marketing personnel, whose compensation traditionally relies heavily on bonuses and incentives, were awarded an average of $10,570 in bonus pay.
Among other categories, R&D personnel received bonuses of $7590, product design engineers earned average bonuses of $5750, and production and manufacturing employees reported bonuses of $5630.
On average, the total compensation package for professionals in the U.S. device industry during the past year amounted to nearly 31% more than their salary by itself. As in past years, the difference between salary and total compensation varies greatly among the categories in MD&DI's survey. Marketing personnel lead the way in this area, receiving more than 36% of their total compensation in the form of nonsalary items. Total compensation for these professionals rose to $93,100 this year.
A surprising second for nonsalary items was the category of QA/QC personnel, who this year received nearly 33% of their total compensation in this form. Total compensation for QA/QC professionals jumped to $70,100.
Two categories in this year's survey received nonsalary benefits at a rate close to the industry average. Personnel in the categories of R&D and production and manufacturing reported that their total compensation included slightly more than 30% nonsalary items. Total compensation for R&D professionals rose to $87,800, while production and manufacturing personnel earned a total compensation of $79,400.
While general and corporate managers have traditionally led the way in the nonsalary portion of their compensation, this year professionals in this category reported that their nonsalary benefits amounted to slightly less than 30%, dropping the category to fifth place among those surveyed. Total compensation for general and corporate managers came in at $119,400 for the past year.
Average Salary, Compensation, | |||
Job Function | Salary | Total | Latest |
| QA/QC | $52,800 | $70,100 | 5.5% |
| Product Design/ Engineering | $58,000 | $71,100 | 5.7% |
| Production/ Manufacturing |
$60,900 | $79,400 | 5.8% |
| Regulatory/ Legal Affairs | $65,700 | $81,000 | 6.0% |
| R&D | $67,600 | $87,800 | 7.2% |
| Marketing | $68,300 | $93,100 | 6.5% |
| General/ Corporate Management | $92,200 | $119,400 | 9.7% |
| Industry Average | $63,800 | $83,400 | 6.2% |
Next: The Employee
