Without a doubt, whether you are at the furthest corner of Auckland or the highest office suite in New York, company executives earn a lot more than the average worker. A report in the New Zealand Herald put the difference between CEOs’ pay and the average workers at an astounding 55 times. But, disparities in remuneration exist even among the executive ranks.
The most common reason why executives enroll for MBAs is to get a salary increment. Others do the MBAs to change their career direction.
This partly explains why various institutions aggressively market MBA programs. Many senior level CV writers will also ask if you have an MBA.
Whereas an MBA gives you leverage to negotiate for better pay, the rise is not always automatic.
Below are factors that influence the pay rate for executives.
Achievement of Company Goals
Executive pay can be high, but for most companies, it must first be justified. Many companies peg the salaries of senior-level staff, as well as the rate of increase, to the attainment of financial metrics such as company earnings, stock performance, and cash flow.
According to the chairman of New Zealand’s Shareholders Association, modest increases in CEO’s pay experienced in 2017 were due to “flat company earnings”. In 2017, former Fonterra CEO, Theo Spierings, was paid $8.3 million. This was a staggering 57% hike from the previous year’s $4.66 million payment. The rise was largely attributed to the performance of a single product and annual bonuses. However, the company withdrew the product and later revised its executive remuneration policy pegging it to return on capital and earnings per share.
Senior level CV writers know that industry achievements can position you for a higher salary. They can help you highlight achievements on your CV.
Internal Pay Structures
Before companies started racing for top executive talent, internal pay structures governed the pay rise of executives. Boards didn’t set executives’ pay based on what their peers at competing firms earned as a retention strategy.
Some companies have gone back to this approach. Besides the numerous benefits of promoting from within, a rise in business schools offering MBAs has increased the availability of well-trained talent. Thus, firms are no longer racing for the “super executive.”
For such firms, company values are more important than profits or market leadership. For instance, a company may highly regard consistency and equality among staff. Thus, peg executive’s salaries to what others earn. Rather than counting on the MBA to frog-leap your salary, senior level CV writers will help you to align your profile with a target company’s values.
Level of Experience
According to Diane Morgan who headed the careers services at London Business School (LBS), a salary rise does not come immediately after graduating with an MBA. In her view, growth is slow and steady. Significant rises often take place about three years after graduation.
This “delay” could be attributed to performance metrics, or the employer adopts a ‘wait and see’ approach.
Whatever the case, the change in salary is attributed to your experience and performance more than the MBA.
Personal Preferences
Salary is just one component of a job. Candidates also consider the job content, career prospects and opportunity to grow. You may have obtained an MBA, but opt for a lower-paying job with a higher personal fulfillment.
Senior-level CV writers can help you craft a CV that attracts just the right kind of employer or job.
In conclusion, although there’s a general rise in demand for executive-level talent an MBA does not automatically result in a salary raise. You can work with senior level CV writers to craft a CV that showcases your ability to deliver superior performance and reflects company values.
The pay rise will soon follow.
