Agency executives on either coast admit the trade in top people is now a two-way street.
The cost of living on either coast is an obvious reason for the higher salaries. Business growth is another.
The survey also reveals that 52% of Western agencies anticipate billings growth of more than 10% for '95, the highest among regions. Last year, 40% of agencies in the West expected such growth.
Besides a slight uptick in the retail market-Southern California agencies' client base-the rosier outlook may have something to do with fewer competitors. "We've seen a lot of independent agencies folding here," says a Los Angeles agency executive.
The bonus structure in the West also is tied to agency or department operational goals, unlike elsewhere.
No doubt part of the reason is that the West, particularly Southern California, is just coming out of recession. Economic downturns make businesses cost-conscious, leading to the adoption of incentive pay whether bonuses, raises or both.
"If this company does well we all benefit in salary increases or bonuses. So we incentivize," says Bruce G. Silverman, president of Asher/Gould Advertising, Los Angeles.
Mr. Silverman cautions that the Southern California economy still remains precarious. A McDonnell Douglas/Boeing Co. merger could lead to extensive job losses, particularly in the Long Beach area, if operations shift to Washington, Boeing's home state.
Retailing received a blow when Broadway Stores was bought by Federated Department Stores at midyear, leading to the closure of several Broadway units.
The South enjoys greater raises for most senior agency positions than elsewhere, and higher bonuses as a percent of pay, particularly for the CEO. (CEO bonuses average 45% of base pay in South vs. 20%-30% elsewhere.)
The higher raises are a function of lower salary levels; higher bonuses may be tied to conservatism.
"We want to be here 20 years from now. That's why we give bonuses not raises," says Ann Proud, president of Media Directions Advertising, Knoxville, Tenn. "If you reward with raises, the payroll pretty soon is skyhigh. Then if recession hits-bingo! You're dead."