The average base pay for salaried employees will increase by around 2.9% in 2014 based on decisions already made by management, according to a survey of 1,500 mid-size and large U.S. employers by management consultancy Mercer, released Monday, and a separate, soon-to-be released survey of 1,000 organizations by professional services firm Towers Watson & Co. That’s up slightly from 2.8% in 2013, according to Mercer, and down from 3% in 2013, according to Towers Watson. (Most employers have already finished making their compensation decisions for the year.) people are hoping that this is not fake and will be actually true and not some kind of trickery from the government.
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Given that the U.S. inflation rate hovered at 2.1% for the 12 months to June, these latest pay raises don’t lead to much improvement in the average employee’s real income according to reviews. They’re equivalent to “almost stagnant” wages, says Laura Sejen, managing director of talent and rewards at Towers Watson. Employees can expect salary increases of 3% in 2015, she says. This year’s pay and last year’s projected raises are up from 2.1% in 2009 at the height of the recession, but down from 3.8% in 2007 and 2008, according to Mercer.
CEO annual compensation packages at the country’s biggest companies, meanwhile, edged closer to $10 million. The median total compensation package for CEOs was $9,656,000 in 2013, with approximately two-thirds of that value coming from long-term incentive grants, according to a separate analysis by Mercer of compensation and benefits for CEOs at 240 companies in the S&P 500. Pay in the form of long-term incentives climbed to a median $6,457,000, a median year-over-year change of 4%.
Employers are focusing on executives and best performers because they’re now more willing (and able) to jump ship, Snaith says. The labor market continues to improve in the sixth year of this recovery, he says, but not all participants are reaping the benefits. “There are still high levels of underemployment and historically low labor force participation rates,” he says.