The last 18 months have been difficult ones for the publishing industry, and that is reflected in the litany of negative numbers uncovered in PW’s annual salary survey. While there are many statistics to chose from, three stand out as a testament to the issues confronting industry members.
As the chart shows, 35% of workers did not receive any raise last year, while another 21% received a raise of less than 3%. That combination was a major factor in limiting the average raise in 2008 to just 3.3%, the lowest in more than five years. The percentage of industry members who didn’t receive a raise in 2008 seems likely to increase in 2009 as 70% of respondents to the survey—e-mailed this spring—reported that their company had instituted a salary freeze, with 63% saying there was also a hiring freeze. Sixty-one percent of industry members said their companies have had layoffs. Only 10% of publishers had not taken any action to control personnel costs in the 18-month period. Given the drumbeat of bad news, it is not surprising that publishing employees have never felt less secure about their jobs. Only 13% of workers say they feel very secure in their jobs, an all-time low, while 11% feel very insecure, an all-time high. Editorial employees had the highest rate of insecurity, with 38% saying they are worried about their jobs.
The uncertain transition from print to digital resulted in 42% of workers citing industry/company instability as a major cause of job dissatisfaction; in 2007 only 32% cited instability as a major reason behind their unhappiness with their jobs. Low pay remained the top reason for dissatisfaction, although the percentage of workers who mentioned low salary fell last year compared to 2007.
In addition to receiving small or no raises in 2008, the number of employees who received bonuses in 2008 fell from 53% to 45%. The average bonus also declined in most areas, with the one exception being in management, where the median bonus increased by $5,000.
Payroll expense is not the only area where publishers have cut back: 66% of industry members reported that their companies have reduced marketing budgets, and 63% have cut travel and entertainment expenses. A number of industry members also mentioned that their companies have reduced attendance at trade shows, and others are moving more titles to print-on-demand or digital. All but 12% of publishers instituted some form of cost-cutting measures, with 94% of religion publishers taking some action.
The weak economy is helping publishers push green initiatives in some areas. The use of teleconferencing skyrocketed in 2008, with 63% of employees saying their companies have increased use of teleconferencing to reduce travel costs compared to 46% in 2007. Publishers are also cutting their use of paper, with 41% of companies using electronic galleys to distribute manuscripts in-house and 39% using electronic catalogues. The greatest use of e-galleys is at trade houses, where 57% reported moving to e-galleys. Religion publishers are the most aggressive in moving to e-catalogues, with 51% moving to that format. The use of hybrid cars for the sales force has gained little traction, with only 4% of publishers taking that step, down from 5% in 2007. And while many industry members talk about the need to reduce returns, only 3% said they have taken any steps, while 8% reported that their companies plan to change their returns policy.
Despite the unhappiness and unease among many, only 26% of industry members expect to leave their jobs in the next two years, down from 30% last year, and only 11% expect to change careers, the same percentage as last year.
In terms of trends in pay scale, men still outearned women by a lot (although the median salary gap of $30,600 was smaller than the 2007 spread of $39,080), and management is still the field where the biggest salaries are. One somewhat different finding is that the Mid-Atlantic states are not necessarily the place to find the highest salaries. The only field where the Mid-Atlantic region had the highest pay was in operations, while the West took the top spot in editorial, sales & marketing and management. One possible explanation is that the recent layoffs at East Coast publishers have taken a toll on more experienced workers. The average length of time in the publishing business of respondents working in the Mid-Atlantic was 11.1 years in the most recent survey, compared to 11.9 years in the previous, while the length of time in New England was cut from an average of 13.6 years to 12.3 years. In the West, the average time in publishing increased to 13.0 years from 12.3 years. Certainly experience brings higher costs, as this chart shows.
All results of the survey are based on 1,408 responses to an online questionnaire sent to PW subscribers. You can also find this story, with graphics, beginning on page 25 of this week's magazine.
Average Annual Raise:
How Secure Employees Feel About Their Jobs:
Number of Employees Who Would Recommend Publishing As a Career:
Female Compensation Vs. Male Compensation:
|Women avg. pay||$66,000|
|Men avg. pay||$96,600|
|Actions Taken to Control Payroll|
|Suspension of 401(k) Contributions||17%|
|Ending traditional pension plans||12%|
|Actions Taken To Cut Other Expenses|
|Cut marketing budgets||66%|
Selected Executive Salaries*
|Barnes & Noble|
|Stephen Riggio, CEO||$800,000||0||1,961,507||$2,761,507|
|Mitchell Klipper, COO||800,000||0||1,557,611||2,357,611|
|Base salaries of all top execs, including Steve Riggio and Mitchell Klipper, were frozen in 2008 and again in 2009. Incentive compensation declined for Riggio and Klipper in 2008, although the cash bonuses for both increased by $200,000 to $900,000.|
|Clyde Anderson, Chmn., CEO||$341,000||0||$11,000||$352,000|
|Sandy Cochran, CEO||472,000||0||0||472,000|
|The base salary for Clyde Anderson rose 1.8% last year, while Sandy Cochran’s salary rose 3.7%. Total compensation declined, however, due to a large drop in incentive awards. Cochran left BAM in March 2009.|
|Mark Bierley, EVP, CFO||$278,269||$124,200||$164,862||$567,331|
|Dan Smith, EVP, CAO||338,365||120,000||281,166||739,531|
|Beginning with Ron Marshall’s appointment as CEO in January 2009, the Borders executive team was overhauled, with severance payments to departing execs and retention bonuses to others. Mark Bierley’s total compensation included a $159,000 retention bonus, while Dan Smith received a retention bonus of $272,000 (included under “Incentive” above, but technically “Other”). Severance for former CEO George Jones totaled $2.3 million and for former CFO Ed Wilhelm $1.5 million. Ken Armstrong, former exec v-p/U.S. Stores, and Rob Gruen, former exec v-p/merchandising & marketing, received severance of $654,000 and $873,000, respectively.|
|Educational Development Corp.|
|Randall White, Chmn., CEO, Pres.||$150,000||$22,000||0||$172,000|
|Randall White’s salary and bonus stayed even in the fiscal year ended February 28, 2009, compared to fiscal 2008.|
|John Makinson, Chmn., Penguin||£525,000||£500,000||0||£1,240,000|
|Will Ethridge, Chief Exec., North America Education||361,000||810,000||0||1,171,000|
|Total compensation for John Makinson fell 14% in 2008 due to a small decline in base salary and a larger drop in incentives. Part of the bonus for Will Ethridge, listed for the first time, was due to his efforts in the Google Book settlement plus oversight of the Pearson content management program.|
|Richard Robinson, Chmn., CEO, Pres.||$870,000||0||$610,088||$1,480,088|
|Margery Mayer, EVP, Pres., Education||618,000||0||207,594||825,594|
|Judy Newman, EVP, Pres., Book Clubs||587,100||0||212,714||799,814|
|Dick Robinson’s base salary remained at $870,000 in the fiscal year ended May 31, 2008, but incentive compensation was $610,088 compared to zero in fiscal 2007. The majority of the increase in Margery Mayer’s total compensation was due to higher incentive awards. Fiscal 2008 was the first year Judy Newman appeared in the Scholastic proxy statement.|
|Will Pesce, Pres., CEO||$924,167||$584,374||$1,271,016||$2,779,557|
|Stephen Kippur, EVP, Pres. Prof/Trade||464,583||171,500||173,736||809,819|
|Will Pesce received increases in salary and incentive pay in the fiscal year ended April 30, 2008. Stephen Kippur had slight increases in salary and bonus, but incentive compensation declined by 60%.|
|* Compensation excludes long-term incentive plans, which usually take the form of stock options and awards.|
Number of Employees Receiving Bonuses:
How Companies Increased Their Use of Digital Technology to Be More Green:
|Increasing use of teleconferencing||63%|
|Printing books on recycled paper||52%|
|Using e-readers to distribute galleys in-house||41%|
|Moving to electronic catalogs||39%|
Biggest Complaint from Employees:
|Lack of advancement||42%|
|Lack of recognition||35%|
|Problems with management||27%|
How Satisfied Employees Are with Their Jobs:
|Satisfied with job||50%||52%||49%||50%||56%|
|Unsatisfied with job||50||48||51||50||44|
Median Salary By Region:
|S||Sales & Marketing|
Median Compensation Based on Years Experience:
|Less than 3||3 to 6||7 to 10||Over 10|
Median Compensation By Position and Revenue:
|Total||Under $10 Million||$10 million—$99.9 million||$100 million—$499.9 million||$500 million +|
|Sales Rep/Account Manager||67,750||47,000||60,500||65,000||85,450|
|Senior Management (Pres./CEO/Owner)||100,000||96,000||120,000||410,000||416,750|
|Executive Vice President||134,500||109,914||155,000||263,500||159,500|