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SALARY SURVEY;RAISES UP A BIT AT MARKETERS;BUT WHILE MORE AD AGENCIES ARE PARCELING OUT RAISES, THEY'RE SLIGHTLY LESS THAN '95 LEVELS

By Published on .

V P-level positions at marketers can expect a few dollars more than their salary boost in '95, according to the fourth annual salary survey prepared by Altschuler, Melvoin & Glasser for Advertising Age.

At the same time, top advertising agency personnel can expect slightly smaller raises in 1996 than this year.

Bonuses as a percentage of base pay for this year will shift downward, from the mid-teens in '94 to between 6% and 11% for the lower senior levels at ad agencies, to 6%-9% for VP-level positions for marketers vs. 18%-26% in '94.

There is consolation, although even that is mixed: More agencies will dole out raises this year than last, although fewer marketers will do so.

The level of companies blocking any raises-5% for most agency salaries to nearly 20% for VP-level pay among most marketers-may be influenced by a change in the raise schedule from 12 months to 18- or even 24-month periods.

"We're trying to stretch our raise schedule to 15 to 18 months," admits Howard Gelman, exec VP and chief financial officer at Adler, Boschetto, Peebles & Partners, a New York ad agency.

Such stretching began in the recession of the early '90s. But with costs in general remaining high, this pay schedule, he feels, was a better way to control them.

There are numerous variations to the raise-schedule theme. One is to keep junior-level raises to annual schedules because of the lower pay scale, and move senior-level raises to a less frequent period.

One of the most sophisticated if not nightmarish schemes is in operation at agency Lord, Sullivan & Yoder, Columbus, Ohio. Its raises are tiered: 15 months at one salary level and 18 months at another while computations are tied to anniversary days.

Why 18 months?

"Because the market wouldn't allow 24," contends Glenda Shasho Jones, president of Shasho Jones Direct, New York, a shop specializing in catalogs.

However, Jones-like most agencies (71% in the survey)-still keeps to an annual cycle for raises. Data show that the larger the agency, the greater the tendency to move off the 12-month cycle.

At agencies, the CEO will get the biggest raise among the hierarchy-still a rather small 7.25%-but they're three times more likely to not get a raise as creative directors and art directors.

Some 15% of the agency responses indicate they'll nix a CEO pay increase. However, only 5% say their CDs and ADs wouldn't get a raise, while merely 3% say "no" to raise seekers in other executive levels.

Compared with last year's survey, these are low "rejection" rates, indicating the purse strings are loosening.

Last year's survey reported 32% of agencies would not increase their CEO's pay, 20% would not hike CD pay and 13% (the lowest percentage) would not advance chief copywriter pay.

Agency coffers-building is no doubt influencing the broader receptivity to raises: Nationwide, 43% of agencies expect greater than 10% growth in billings for 1995. Average growth for all agencies is 8.6%, virtually replicating '94 results.

A reduction in employment could provide a larger pot for raises, although many agency departments are hiring: Fifty-eight percent of responders are boosting employment, 17% are decreasing and 25% haven't changed.

However, incoming staffers aren't paid at commensurate levels as employees laid off during the early '90s.

"Beginning pay for junior-level employees hasn't changed much since the recession," says Ms. Jones. "But we're finding senior-level people demanding and getting more pay because there just aren't enough good senior people to go around."

Agencies opening wallets to CEOs is probably as much a reflection of the agency ownership structure as an improved year in billings. CEOs of many of the participating agencies hold stock and are in a position to know what the market will bear.

The typical agency in the AM&G/Ad Age survey is independent; generates $24 million in billings; is Midwest-based and carries a staff of between 11 and 30.

Regionally, CEOs and creative directors in the East and West will receive stronger raises than their contemporaries in the South and Midwest.

An East Coast CEO, for example, is expected to get an 11% raise (10% for CEOs in the West, which leads all regions in CD pay increase at 9%).

But the South holds the steady hand; its base pay increases are either higher or as high as the other regions in the remaining five agency executive positions.

Raises among advertisers/marketers will average a high of 8.5% for brand managers to 5.4% for VP-advertising, on par with the 7.2% to 5% range found in last year's survey of the four marketing titles.

Unlike their agency brethren, a higher percentage of marketers will not receive raises in '96, led by the top position surveyed in this report: VP-marketing.

Some 24% of those responding are saying "no" to pay increases for the VP-marketing in '96.

It seems across-the-board pay increases come in two-year cycles: Last year's survey found 16% wouldn't boost pay for VP-marketing, the highest percentage of naysayers for any post. The percentage dropped to as little as 5% rejecting pay increases in '95, for VP-brand manager.

"It is embarrassing that many companies are doing so well and yet the average worker is not making much more than in the prior year. You might call it a lack of corporate conscience," says Jerry Beliveau, senior compensation analyst at Physicians Mutual Insurance.

R. Craig Endicott contributed to this story.

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