Dot.compensation Rises for Survivors

January 22, 2001 ( - In the midst of an industrywide shakedown, Internet companies continue to boost pay for their best talent. The average base pay this year is $150,000 for a vice president of human resources, according to a new study by Watson Wyatt Worldwide.

Those fortunate enough to survive the shakeout could see an average salary increase of between 7.7% and 9.7%, according to the study.  That compares to 4.4% in the general economy and 5.7% for technology businesses.
Mixed Blessings

While base salaries are expected to rise, the dot.coms are also using mixed compensation packages comprised of stock and cash, and non-monetary rewards as an added incentive, the study said. 
More than eight out of 10 Internet and e-commerce companies (84%) use stock as a type of compensation. Geographically, this practice was more prevalent in the Western states – and Silicon Valley – which saw a high of 92%.  Central states were at the other end of the scale, with stock compensation a factor at just 74% of respondent firms.

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Among those that use stock as a form of compensation:

  • 94% offer stock options
  • 33% offer employee stock purchase plans
  • 22% offer 401(k) or other savings plans with company stock

Stock Shop
Hiring bonuses are also being offered as incentives, with over 40% of the survey respondents saying they offer some form of stock bonuses, as follow:

  • 34% – senior executives
  • 22% – management
  • 22% – professional or technical
  • 8% – non-exempt employees

Between 17% and 35% of Internet and e-commerce companies conduct salary reviews more than once a year, according to the study.

The most common form of incentive pay for senior executives:

  • 85% – annual bonuses
  • 16% – spot awards
  • 16% – key contributor retention awards
  • 13% – cash profit sharing