The average stock price for the 18 Stock companies in the study was down approximately 62% from their January 1 levels, significantly lower than most other industries. With this drop in stock prices, employee stock options are likely underwater, adding to the level of employee concern.
Wilton, CT (PRWEB) October 31, 2008
A new report by Corporate Compensation Strategies across 31 of the largest Life Insurance companies indicates respondents are forecasting significant 2009 merit budget reductions, as compared to forecasts just three months ago in July.
Highlights of the new study include:
- For all non officer levels, the median (50th percentile) merit pool is forecasted to be reduced by 17%.
- About 26% of all respondents are considering eliminating Officer merit increases altogether.
- About 20% are taking a wait and see approach, but many of these are anticipating further reductions in their merit budgets from prior forecasts.
"The industry has been tracking at about 3.5% for the last 5 years" according to Ron Contino, Principal at CCS. "Many of these companies have large P&C operations that will likely follow the same merit trend."
"We anticipate the average merit budget in 2009 will be at levels not seen in a very long time. This will make differentiating performance more difficult than ever, with good performers making only slightly more in merit increases than average performers. While, in the past, many companies have shifted dollars to variable bonus plans to offset lower merit increases, we think it unlikely, given the financial uncertainty at this time."
Contino adds, "The average stock price for the 18 Stock companies in the study was down approximately 62% from their January 1 levels, significantly lower than most other industries. With this drop in stock prices, employee stock options are likely underwater, adding to the level of employee concern."
About Corporate Compensation Strategies, LLC
Corporate Compensation Strategies (CCS) is a Connecticut-based compensation consulting firm dedicated to providing accurate and timely compensation information and providing context to base, incentive and executive compensation. The firm supplies critical compensation support by utilizing their extensive library of survey information, offering clients the most comprehensive compensation information available. You can find additional information at http://www.ccstrategies.com or call Ron Contino at 203-762-2771.