Recent reports by Bowker and the Book Industry Study Group have found solid growth in recent years in independent publishing, both in terms of the number of companies and the revenue generated by those houses. So maybe it shouldn't come as a surprise that our 16th annual salary survey—our broadest to date with 1,055 responses—drew significantly more responses from small publishers that are not based in the Northeast than any previous year.

The impact of receiving more information from small houses has been to lower the median salary within the industry, although smaller publishers tended to give bigger raises last year than did larger houses. Companies with sales below $10 million gave an average raise of 6.3% in 2005, compared to the industry average of 5.3%. Employees at smaller houses also were more satisfied with their jobs than their counterparts at larger houses.

But there are negatives working for a smaller house, starting with the finding that has held true every year of our survey—smaller houses pay less than large companies. Other trade-offs include a longer time between raises—the cycle at the smaller houses averaged 15.1 months, compared to 12.3 months for the largest publishers. Working at larger houses also offers more room for advancement, and the survey also found that those who described themselves as most secure about their jobs worked at the larger publishers.

Overall, industry members' sense of job security declined marginally in 2005; while the majority reported no change in job security in the year, slightly more employees felt less secure about their jobs than those who had a degree of certainty about their future.

Of course, the best way to get a meaningful increase in pay, whether at a big or little house, is to change jobs or earn a promotion. The average increase for those in a new job was 15% in 2005, with more than 25% reporting an increase of better than 20% when starting a new position.

In response to a new question, 75% of respondents said their job responsibilities have changed over the last three years. Slightly more than half cited a promotion as the reason for new duties, while 23% reported that they took on additional responsibilities because of downsizing. The introduction of new technology prompted a change in duties for 20% of the survey sample.

A look at selected executive salaries (from companies' proxy statements) bears out the overall finding of PW's survey—bigger company, bigger paychecks. Randall White, who runs the $31-million Educational Development Corp., took home $172,000 in 2005, while Terry McGraw, head of the $6-billion McGraw-Hill Cos., earned nearly $3 million in salary and bonuses.

Neither Audible chairman Don Katz nor CFO Andrew Kaplan received a bonus in 2005, but the two top execs did get a nice bump up in base salary—Katz's salary was up 31.6% last year.

Higher bonuses were the key to increased compensation at Barnes & Noble last year. None of the top-paid officers at B&N received an increase in base salary in 2005, but bonuses were up across the board. Both CEO Steve Riggio (salary $750,000) and B& CEO Marie Toulantis (salary $600,000) received 16.7% more in bonuses last year, while publishing head Alan Kahn got a 14.3% increase in his bonus, in addition to his salary of $550,000.

Total take-home pay for Books-A-Million CEO Sandy Cochran and executive chairman Clyde Anderson increased modestly in 2005. Cochran's salary rose 5% and her bonus increased 1.3%, while Anderson's salary stayed even at $325,000, but his bonus rose 9%.

No bonuses were handed out at Borders Group last year, resulting in a steep decline in annual compensation for the retailer's top wage-earners. A salary increase of 1.9% for chairman Greg Josefowicz and a 9.6% salary increase for Borders U.S. president Vin Altruda were more than offset by the lack of a bonus in 2005.

At printer/publisher Courier Corp., chairman Jim Conway saw moderate increases in his salary and bonus last year, while total compensation for senior v-p George Nichols was driven by a 38% increase in his bonus.

The minor increase in take-home pay for Educational Development Corp. chairman Randall White was tied directly to his raise in salary; White's bonus stayed at $22,000.

Houghton Mifflin CEO Tony Lucki's bonus dropped 17.8% in 2005, while his salary stayed at $600,000. McDougal Littell division president Rita Schaefer's salary dropped 2.6% and her bonus took a more significant decline: 43.8%.

Modest gains in both salary (to $1,172,000) and bonus (to $1,827,504) resulted in compensation of just under $3 million for McGraw-Hill Cos. chairman Terry McGraw.

A rebound in Penguin's performance in 2005 helped drive the total compensation package for Penguin Group head John Makinson up 58%, the biggest gain of all executives in PW's survey this year. Makinson's £1,250,000 ($2,375,000) total consisted of a salary of £475,000, a £564,000 bonus and £211,000 in other remuneration.

For the fiscal year ended May 31, 2005, Scholastic chairman Dick Robinson earned a bonus of $419,905 after not receiving any bonuses in the previous two years. His base salary increased 6.8%. Margery Mayer's salary rose 9.4% in fiscal '05, and her bonus nearly doubled, to $260,000.

John Wiley & Sons CEO Will Pesce's bonus fell 12.5% in fiscal 2005, offsetting a 4% salary increase. Professional/ trade chief Stephen Kippur's salary also increased 4% in fiscal 2005 and his bonus rose about $30,000.

Selected Executive Income, 2005 vs. 2004

2005 2004 % Change
Don Katz, Chmn., CEO $250,000 $190,000 31.6%
Andrew Kaplan, EVP, CFO 212,800 190,000 12.0
Barnes & Noble
Steve Riggio, Vice Chmn., CEO 1,406,250 1,312,500 7.1
Marie Toulantis, CEO, B& 1,125,000 1,050,000 7.1
Alan Kahn, Pres., B&N Pub. 990,000 935,000 5.9
Sandy Cochran, Pres., CEO, Sec. 805,000 780,000 3.2
Clyde Anderson, Exec. Chmn. 578,854 557,188 3.9
Borders Group
Greg Josefowicz, Chmn., Pres., CEO 723,654 1,008,733 -28.3
Vin Altruda, Pres., Borders U.S. 328,654 433,714 -24.2
Courier Corp.
Jim Conway, Chmn., Pres., CEO 606,550 587,500 3.2
George Nichols, SVP, Chmn., Nat'l Pub. 644,900 551,250 17.0
Educational Development Corp.
Randall White, Chmn., Pres., Treas. 172,000 169,500 1.5
Houghton Mifflin
Anthony Lucki, Pres., CEO 1,407,167 1,713,529 -17.8
Rita Schaefer, Pres., McDougal 565,221 774,229 -27.0
McGraw-Hill Cos.
Terry McGraw, Chmn., Pres., CEO 2,999,504 2,880,000 4.1
John Makinson, Chmn., Penguin £1,250,000 £791,000 58.0
Richard Robinson, Chmn., Pres., CEO 1,264,465 838,828 50.7
Margery Mayer, EVP, Pres., Schol. Ent. 742,691 576,346 28.9
John Wiley & Sons
Will Pesce, Pres., CEO 1,819,616 1,935,938 -6.0
Stephen Kippur, EVP, Prof./Trade 843,496 796,396 5.9

Average Raise Retrospective

2001 2002 2003 2004 2005
5.4% 5.1% 4.9% 4.9% 5.3%

Smaller but Happier
Employees at smaller publishers, (houses with revenue below $10 million), tended to be the most extremely satisfied or very satisfied with their jobs. The gloomiest were employees at mid-sized companies, where 18% were unhappy.

&$1m &$10m $10-$99.9m $100-$499m >$500m
Happy 58% 54% 46% 45% 52%
Hanging in There 31 34 35 44 37
Unhappy 11 12 18 11 11

Bigger and Richer
No matter what job a person holds at a publishing company, in general the bigger the house the higher the pay. Below, the median salaries for the major job functions, sorted by size of company.

&$1m &$10m $10-$99.9m $100-$499m >$500m
Management $60,000 $75,000 $160,000 $170,000 $170,000
Sales/marketing 39,000 47,500 64,000 65,000 80,500
Editorial 40,500 42,000 55,000 53,000 66,000
Operations 44,000 44,800 68,700 65,000 80,000

Average Pay Raises
Managers not only make the most money, they also had the largest raises last year.

Management 8.2%
Sales/marketing 5.0
Editorial 4.9
Operations 4.8

Less than half of our sample reported receiving a bonus in 2005, though bonuses were handed out much more frequently at larger companies than small publishers.

&$1m &$10m $10-$99.9m $100-$499m >$500m
15% 27% 46% 56% 63%

Number of Hours Worked Per Week

&$1m &$10m $10-$99.9m $100-$499m >$500m
46 46 47 48 48
Management 51
Sales/marketing 47
Editorial 46
Rights 46
Operations 46