Survey Says: Industry Salaries Rose & Bonuses Exceeded Targets in 2013
Despite the continued uncertainty in the U.S. economy, CTHRA’s 2013 Annual Compensation Surveys found that overall, multiple systems operators (MSOs) and programmers increased their compensation packages this year. This fact isn’t surprising given that retaining talent is a strategic business initiative for many industry employers, which has resulted in low voluntary turnover. (click here to read about this finding and more from CTHRA’s 2013 Human Capital Metrics Survey)

“Overall, it was a strong year for compensation among programmers and MSOs with steady salary growth, bonuses that met or exceeded target and strong stock awards and performance,” added Hali Croner, Chief Executive Officer of The Croner Company, which conducted CTHRA’s 2013 survey.

Sixty-three companies participated in the survey, and results show that for the third year in a row, cable salaries grew at a pace consistent with the national average. In general, steady growth in base salary drove most of the compensation increases for non-executives at both programmers and cable operators. Selected executives at MSOs and programmers saw strong performance of short-term incentives (STIs) and in some cases, large long-term incentive (LTI) awards.

Even with flattening subscriber bases, MSO growth was fueled by higher rates from expanded services, higher-speed broadband offerings, increases in broadband subscribers and rising affiliate fees. Programmers were bolstered by increased advertising revenues — up 3% to $66 billion in 2013 and expected to reach $75 billion by 2017i. The media industry’s recent strong performance has helped produce the best risk-adjusted stock return of the top S&P 500 industry categoriesii .

“Despite the media’s focus on the ‘cord cutting’ trend, there has been solid growth in our industry. The cable industry is still full of opportunities,” said Susanna Chan, Senior Director of Compensation and Talent Planning for Charter Communications.

Salary Adjustment Budgets Consistent with National Average

CTHRA’s analysis revealed that 2013 salary adjustment budgets (which include pay raises delivered through merit increase, promotional increase and market or cost of living adjustment) rose at nearly the same rate as last year. Cable operators reported an average salary adjustment budget of 3.0%, while programmer salary budgets grew by 2.9%. Nationwide, 2013 salary adjustment budgets averaged a 2.9% increase (see Table 1iii ).

MSOs Increase Base Salaries, Executives Reap Large LTI Awards

Among cable operators, base salaries grew consistently across all job categories — 3% — with the exception of corporate management, which saw base salaries rise by 5% in 2013. Another notable exception was the robust gain in total direct compensation (TDC) for MSO executives — jumping 28% in 2013 — fueled by large LTI awards for selected executives (see Table 2). This spike was powered by MSOs’ rising market capitalization as well as by increases in shares awarded.

The other significant, positive trend in MSO compensation was the strong performance of STI awards versus target. In 2013, bonuses exceeded targets to a greater extent than last year and outpaced last year in all categories — ranging from 3% above target for corporate and salaried employees to 10% above target for sales (see Table 3).

“Short-term incentives against target are a great bellwether for company performance,” shared CTHRA board member Lisa Kaye who is president and CEO of greenlightjobs.

Programmers See Increases in Base Salary, Bonuses and Robust Growth for Ad Executives

Base salaries for non-sales positions also rose among programmers, with increases ranging from 1% to 4% (see Table 4). These increases drove most compensation growth for non-sales positions. The exception — executives — for whom STI increases, and in selected cases LTI awards, boosted pay.

A bright spot for programmers was the robust compensation surge for nearly all sales positions, particularly ad sales. Base salaries for sales jobs rose from 1% to 10%, with ad sales account executives (AEs) seeing the biggest gains. Bonuses drove compensation still higher for many in this sector, especially ad sales AEs who experienced a 17% increase in TCC in 2013 (see Table 5).

Short- and Long-Term Incentives Still Popular, Boost Retention

Incentives continue to be important components of compensation in the cable industry. Among CTHRA’s MSO survey respondents, 92% offer STI plans to managers and above.

In addition to their compensation value, LTIs, such as stock options, shares and long-term cash awards, have the added benefit of improving employee retention. Some 92% of MSO participants offer LTIs to directors and above, and of those companies 76% offer full-value shares rather than options. Full-value shares are popular with employees as they have value even if share prices drop, whereas options only have value if share prices rise.

“If employees are sitting on a lot of unvested long-term incentives, it’s harder to compete for them because they would leave behind too much money,” explained Croner. “The better a stock price does, the better retention value it has, and the harder it is to get those employees.” Programmers also employ incentives. Some 85% of respondents offer STIs to directors and above. A smaller number, 68%, offer LTIs to vice presidents and above. Similar to MSOs, 85% of programmers that offer LTIs offer full-value shares.

Table 1. Average Salary Adjustment Budget

 

2013

2012

2011

MSO

3.0%

3.1%

3.0%

Programmer

2.9%

3.0%

3.2%

General Industryiii

2.9%

2.8%

2.7%


Table 2. MSO Compensation 2013 vs. 2012

 

Base

TCC

TDC

Corporate

105%

111%

128%

Field Management

103%

103%

102%

Salaried

103%

102%

102%

Hourly

103%

102%

 

Sales

103%

99%

98%


Table 3. MSO STI Awards Above Target

Actual STI Award vs. Target

2013

2012

Corporate

3%

-3%

Field Management

7%

-7%

Salaried

3%

-3%

Hourly

4%

-1%

Sales

10%

9%


Table 4.
Programmer Non-Sales Compensation
 2013 vs. 2012

 

Base

TCC

TDC

C Level/Top/EVP

104%

111%

110%

SVP

101%

104%

102%

VP

103%

105%

105%

Director

101%

102%

101%

Manager

101%

101%

101%

Journey/Professional IC

102%

102%

102%

Operator IC

103%

103%

103%


Table 5. Programmer Sales Compensation
 2013 vs. 2012

 

Base

TCC

TDC

Top/EVP

105%

103%

106%

SVP

102%

96%

97%

VP

101%

107%

105%

Director

103%

107%

108%

Senior Ad Sales AE

103%

106%

106%

Ad Sales AE

110%

117%

117%

CTHRA’s 2013 Compensation Survey reveals that the cable industry continues to use the full array of compensation tools available to attract and retain employees. Cable’s strong performance this year helped boost the value of bonuses and long-term incentives.

Keeping Cable Pay Competitive
CTHRA’s annual salary survey helps the industry maintain competitive compensation practices. “We use the survey results to validate and ensure the competitiveness of the grading of our jobs,” explained Charter’s Chan.

“This is a unique survey that provides us with valuable compensation data specific to our industry. It is a key source of information to keep us informed about the current competitive landscape of our talent market,” she added.

ieMarketer, Media Buyer & Planner Today, 4/3/13
iiBloomberg, Bloomberg.com, 4/2/13
iiiAon Hewitt, 2012–2013 U.S. Salary Increase Survey Highlights

CTHRA’S MISSION is to provide an industry-specific forum and analytics for HR leaders to enable business success.