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The Hottest Openings; Insightful Commentary

'I predict that compensation levels will stay flat'

By Anthony J. LoPinto | Updated on October 17, 2006
Perspective

Its budget season for most companies, public and private, and the most significant line-item is compensation.  Everyone agrees that we’ve had a good run over the past two years, and many professionals have enjoyed the fruits of a strong market and earned healthy financial rewards.  However, most of the upside has been in the form of incentives–bonuses, stock grants and options and other non-recurring compensation–and base salaries have been held in check.  Rather, the focus has been on pay-for-performance compensation.  The extreme in this approach has always been most common within the investment banking arena, where base salaries hover generally around $150,000 while top-tier payouts  commonly reach seven-figures.  These days, compensation at REITs is also tilting increasingly toward the bonus column.  As Excel spreadsheets get cranking for ’07, I predict that compensation levels will, overall, stay flat.  Since most markets are mature, while recruiting levels remain high, compensation should not escalate.  If budgets begin to miss the mark, we will undoubtedly experience the flipside of the pay-for-performance model.

Tony LoPinto is CEO of Equinox Partners, an executive search firm specializing in the real estate industry, and parent company of SelectLeaders.The views expressed in this article are the author’s own.

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