Pay hikes sent packing
|December 11, 2002|
Salary increases take a cut as economic outlook remains cloudy
Inman News Features
Planned pay increases for next year are being cut back from earlier expectations, according to data released today by The Conference Board.
While the outlook for hourly workers is unchanged, 2003 pay plans in 75 major U.S. companies will be lower than originally planned for all levels of salaried employees. Latest survey results put most salary increases next year at 3.7 percent, down from the 4 percent planned earlier this year.
The Conference Board's Compensation Specialist Charles Peck said the cutbacks stem from companies' profit worries as economic uncertainty, stock market volatility and the threat of war continue.
Asked about non-salary pay plans, 30 companies anticipated higher bonuses at 2002 year end than were paid in the prior year. Twenty-three said bonuses would be lower than 200l, and 15 foresaw no substantial change.
In regard to stock option grants for 2002, 12 companies said they were larger than the previous year, 19 said they were smaller and 32 indicated no significant change from 2001.
Other recent compensation actions in light of current conditions include delaying merit increases and eliminating vacation carryovers. One company instituted a voluntary unpaid time-off program.
Stock options have also become less attractive to some companies. Several are shifting to restricted stock grants in lieu of options or decreasing the emphasis on stock plans generally in favor of cash incentives.
Copyright: Inman News Service