Salary Survey

Sluggish industry sales growth in 2003 was reflected in a slight softening in pay raises last year, according to PW's annual salary survey. Although the average raise last year was 4.9%, only two-tenths of a percent down from 2002, some underlying trends were weaker. Most significantly, the percentage of respondents who reported receiving a raise of less than 3% in 2003 rose to 19%, from 14% in 2002. This was the second year in a row that the percentage of respondents who received less than a 3% raise had a meaningful increase; between 2001 and 2002, that percentage rose from 11% to 14%. Results are for employees who remained in the same positions they were in the previous year.

The increase in the number of people receiving a small raise notwithstanding, the majority of respondents, 61%, reported that they received a salary increase between 3% and 5.9% in 2003. The vast majority of respondents also said they had received their raise within one year. The percentage of respondents receiving a raise of at least 6% held steady at 20%.

For most industry members, the largest pay increases were awarded to those who switched jobs or were promoted. Seventy-two percent of respondents who changed jobs in 2003 got a salary boost, with the average increase coming in at 16%. Salary stayed the same for 11% of industry members who changed jobs last year, and for 17%, salaries fell. Approximately two-thirds who reported a decline in salary had been laid off from their previous position before landing their current job.

A new question in this year's survey found that 17% of respondents had joined their present company within the past year. Nearly 40% of people who were in a new job said they had changed jobs within the industry, while 20% said they had been laid off from their previous publishing job. Of the new hires, 16% joined publishing from outside the industry, and 12% said they were in their first job after graduating from college. According to the survey, it took industry members an average of five months to find a new job. Men took a particularly long time to find a new position, six and a half months, while people in operations had the most difficulty finding a new spot, taking an average of eight months to land a new job.

Another new wrinkle in this year's survey is that it was conducted via e-mail rather than snail mail. The change brought more replies from younger industry members. The average number of years spent in publishing fell to 11, from 16 years in 2002. The decline in experience also lowered the average salary for each position since, not surprisingly, greater experience correlated to higher pay. A v-p of sales and marketing, for example, with more than 10 years' experience earned an average of $162,154, compared to $75,000 earned by someone with just three to six years on the job. On the editorial side, an editorial director with more than 10 years' experience took home an average of $88,380, compared to the $76,000 that a person in a similar position but with only three to six years' experience earned.

The younger response rate did not change the one general trend that has dominated the survey since its inception—the most lucrative jobs in publishing are in the management side at the largest companies. The highest average salary in publishing in this year's survey was for the president/CEO at a company with revenue of more than $500 million. But even at the smaller companies, those in the top spots in management earned more than their colleagues in sales/marketing and editorial. At publishers with sales of between $10 million and $100 million, for example, a high-ranking v-p in management earned $174,000, while the publisher position earned an average of $120,000 and the editorial director/editor-in-chief role had an average salary of $86,800.

The younger demographic did yield a slightly higher discrepancy between the average salary of men and women. Men earned an average of $81,045, compared to $59,385 for women—a difference of 36%, compared to a difference of 31% in 2002. One reason for the gap in 2003 is that 57% of men had more than 10 years' experience in publishing, while only 34% of women reported that much time on the job.

The length of time people have spent in publishing also has a great deal of influence on their views of the industry. While 15% of total respondents said they would not recommend publishing as a career, only 9% of those who have been in the industry for less three years held a negative opinion about joining the profession. However, 19% of industry members who have been in publishing for more than 10 years would not encourage people to enter the business. Still, 62% of all respondents said they would recommend publishing as a career, the same percentage as in 2002.

While the percentage of respondents who would recommend publishing as a career held steady, the percentage of industry members who reported a high level of job satisfaction level fell from 64% in 2002 to 59%. Respondents who are unhappy with their job increased from 6% in 2002 to 11% last year. The percentage of people somewhat satisfied with their jobs stayed even, at 30%. By a wide margin, people in management were the happiest in their jobs, with 81% reporting that they were extremely or very satisfied, and only 4% unsatisfied. People in operations were the most unhappy with their positions, with 18% reporting that they were unsatisfied and only 46% saying they were extremely or very satisfied. In editorial, while only 10% said they were unsatisfied with their jobs, only a little more than half (56%) said they were extremely or very satisfied with their jobs. Thirty-four percent said they were somewhat satisfied.

The percentage of respondents who believe they have an opportunity for advancement rose significantly in 2003, to 59%, compared to 44% in 2002. Not surprisingly, the less experienced industry members see the greatest potential for promotion, 68%. However, among the new employees who do not see a chance to move ahead, 44% said they were very frustrated by the lack of upward mobility.

Perhaps because of the younger sample (average age of respondents was 39, compared to 44 in 2002), this year's survey found more people than usual expecting to change jobs within two years. Only 32% of respondents said they expect to be in the same position two years from now, down from 48% in 2002. Twenty-four percent said they expect to be in a higher position at the same company in two years, up from 19% in 2002, while 16% said they expected to be at another publishing house, up from 10%. Fifteen percent said they were unsure where they will be in two years, compared to 10% in 2002; and 8% reported that they will be out of the business in two years, the same percentage as in 2002.

The uncertainty surrounding Advanced Marketing Services' fiscal 2003 results meant no bonuses for the company's top executives. Without a bonus, total take-home pay for Michael Nicita, who resigned as president in April, fell 25%, to $444,468. Kevan Lyon, whose duties now include overseeing PGW, had a 14.5% drop in compensation as the lack of a bonus offset a 9.3% salary increase.

Lower bonuses also cut into compensation for the management team at Barnes & Noble.com. CEO Marie Toulantis had a 22.8% increase in base salary, but a $52,000 drop in her bonus limited the increase in total pay to 7.2%, or $869,153. Dan Blackman, v-p, general manager for books, music and video, had a 7.1% pay raise, to $225,000, last year, but a $40,375 cut in his bonus resulted in a 7.5% decline in take-home pay.

At B&N.com's parent company, Barnes & Noble, modest gains in his salary and bonus resulted in a 6.9% increase for chairman Steve Riggio, to $845,000. COO Mitch Klipper received a slight boost in pay and a $30,000 increase in bonus, to $180,000, bringing his annual compensation to $780,000. For the second year in a row, Alan Kahn, president of the B&N publishing group, had a slight decline in salary and bonus. His take-home pay of $650,000 in 2003 was 4.9% lower than in 2002.

A dramatic earnings improvement in Books-A-Million's most recent fiscal year resulted in big paydays for the chain's upper management. Both chairman Clyde Anderson and president Sandy Cochran doubled their annual compensation last year—both executives received bonuses that equaled their salary ($410,000 for Anderson, $360,00 for Cochran). No bonuses were handed out in fiscal 2003. Cochran took over as CEO February 1, the start of fiscal 2005.

Better earnings also resulted in higher bonuses at Borders Group. The 24.2% increase in compensation for Borders chairman Greg Josefowicz was due largely to the 78% jump in his bonus, to $568,000. The numbers are more modest for chief marketing officer Michael Spinozzi, but his 10.5% increase in take-home pay was due entirely to a $38,125 bump in his bonus.

A better corporate performance also benefited top executives at Courier Corp. Chairman James Conway's 10.6% increase in total pay was led by a 15% increase in his bonus, to $345,000. Senior v-p George Nichols also had a 15% increase in his bonus, to $390,000, a figure that topped his $336,923 salary.

Randall White's salary inched up 1.1% last year, to $130,000, while his bonus remained at $20,000. White, EDC's chairman, president and treasurer, also owns a large stake of EDC stock.

A return to profitability meant a return of bonuses for the top executives at Franklin Electronic Publishers for the fiscal year ended March 31, 2003. Company president Barry Lipsky's 22.3% raise in pay was led by a $63,920 bonus and 3% salary increase. Chief financial officer Arnold Levitt picked up a $27,537 bonus for the year and also got a 3% salary increase.

Executives at Houghton Mifflin had healthy gains in 2003. Sylvia Metayer, who served as interim CEO and COO for a period last year, received a 23.4% increase, driven by a big pay raise. In addition, Metayer received $566,400 under a retention agreement and $88,512 under a deferred compensation plan. Executive v-p June Smith's annual compensation rose due to a 6.4% salary increase and a 51% jump in her bonus. Tony Lucki, who took over as CEO in October, earned $138,462 in salary and received a $554,167 signing bonus.

Lower bonuses offset small salary increases for both McGraw-Hill Cos. chairman Terry McGraw and general counsel Ken Vittor. McGraw took home 5.5% less last year than in 2002 and Vittor received 3.7% less.

A mixed financial performance in the fiscal year ended March 31, 2003, resulted in mixed compensation for executives at Thomas Nelson. President Sam Moore's pay package fell 5.4%, due to a $50,000 reduction in his base salary, to $400,000. Executive v-p Mike Hyatt, who was promoted to president at the beginning of 2004, got a 1.4% increase in his annual compensation—a $25,000 raise, to $200,000, offset a drop in his bonus.

Lower bonuses were the reason behind the decline in annual compensation for both Penguin Group chairman John Makinson and Pearson Education president Peter Jovanovich. Makinson's salary rose 7.4%, to £450 ($778,500), but his bonus dropped 54%, to £127,000 ($220,000). (Makinson also earned £232 million in "other" compensation.). Jovanovich's bonus was cut to £156,000 ($270,000) from £412,000 and his salary dropped to £530,000 ($915,000) from £557,000.

An uneven performance by Reader's Digest in fiscal 2003 also meant different compensation for its executives. Chairman Thomas Ryder's 3% decline in take-home pay was due to a 10.5% cut in his bonus, to $656,125, which offset a small salary increase. Eric Schrier's 8.9% increase in annual pay was led by a 10% salary increase, to $413,846, and a 7.4% increase in his bonus, to $240,500.

A disappointing fiscal year ended May 31, 2003, meant no bonuses for the top executives at Scholastic for the year. As a result, chairman Dick Robinson's annual compensation fell 35% in the year, despite a 4.7% increase in salary. A 4.1% increase in salary for Barbara Marcus was not enough to offset the absence of a bonus, which had been $413,708 in fiscal 2002.

Salaries were up but bonuses down for executives at John Wiley & Sons for the fiscal year ended April 30, 2003. CEO Will Pesce's salary rose 19.1%, to $753,846, but his bonus dropped 10.8%, to $842,025. Stephen Kippur, executive v-p and head of the professional/trade division, had a 12% salary increase to $405,577, but his bonus fell 14.5%, to $283,005.

[Editor's Note: Results are based on 563 responses to an online survey sent to PW subscribers. Because the numbers for some positions are based on small sample sizes, readers are advised to use the data diagnostically rather than conclusively. For more information or to order the complete study for $40, call 646-746-6792.]