Salaries & Compensation
Learn how employers use a combination of wages, deferred pay, and non-cash benefits like paid time off and insurance to attract and retain employees.
Salaries & Compensation
What salary puts you in the 1%?
According to a study from the Economic Policy Institute, the top 1% earned average annual wages of over $823,000 in 2020. Average earnings of the top 0.1% were over $3.2 million. The share of income earned by the top 1% and top 0.1% has grown significantly in the last 40 years. The top 1% accounted for 7.3% of earnings in 1979 and 13.8% in 2020. The top 0.1% have tripled their share of earnings in the same period of time: 1.6% in 1979 to 5.4% in 2020.Learn More: How Much Income Puts You in the Top 1%, 5%, 10%?
How much does the average American make?
According to the U.S. Census Bureau, median household income declined 2.9% from $69,560 in 2019 to $67,521 in 2020, the first statistically significant decrease since 2011. National statistics obscure many troubling disparities. Households headed by immigrants and individuals without a high school diploma each saw a 5.7% decrease in median income, the largest of any demographic. And median income among Black households was $45,870, well below the medians for Asian households ($94,903) and White households ($71,231).Learn More: What Is the Average Income in the U.S.?
What is the highest paying job in the U.S.?
According to the Bureau of Labor Statistics (BLS), the highest paid workers in the U.S. are cardiologists, whose mean annual wage is $353,970. Healthcare jobs consistently dominate the top of the BLS’s National Occupational Employment and Wage Estimates report, an annual ranking of America’s highest paying professions. According to the May 2021 report, 23 of the 25 highest paying occupations are in healthcare—”chief executive” ranked 21st and “airline pilot, copilot, and flight engineer” ranked 24th.Learn More: 25 Highest Paid Jobs and Occupations in the U.S.
How much do finance majors make?
According to the National Association of Colleges and Employers, the projected average salary for business majors graduating in 2022 is $60,695. But business majors have plenty of careers they can pursue with higher average salaries than that. According to the Bureau of Labor Statistics (BLS) Occupational Outlook Handbook, median income for personal financial advisors was $89,330 in 2020. Median income among financial analysts was $83,660, and $73,560 among accountants.Learn More: What’s the Average Salary for a Finance Major?
Employee Stock Option
Employee stock options (ESOs) are a form of equity compensation offered to employees in the form of a contract entitling the employee to purchase company stock at a set price (the strike price) within a set timeframe. ESOs must vest before being exercised. Once an employee exercises their option, they can either hold onto their shares or sell them on the market for a profit. Companies issue ESOs to incentivize employees, whose future earnings rise and fall with the value of the company and who must remain with the company until their options vest in order to exercise them.
Fringe benefits are compensation offered to employees in addition to their hourly wage or salary. Common examples of fringe benefits include health insurance, life insurance, tuition assistance, and employee discounts. Some companies will offer benefits that reflect the business or its industry. For example, an athletic gear retailer may subsidize gym memberships and host in-office fitness classes. Not all employees at the same company are offered the same benefits; some may be reserved for executives or upper-management. Companies use fringe benefits to attract and retain talent.
Employee Stock Purchase Plan (ESPP)
An employee stock purchase plan (ESPP) is a company-run program in which enrolled employees use after-tax payroll deductions to purchase their company’s stock, often at a discount. During the offering period, the employer withholds a certain amount of money from its employee’s paychecks. That money is then used to purchase discounted stock, which is transferred to the employee to keep or sell as they please. Some ESPPs have look-back provisions, which allow the fair market value of the stock to be either the price at the beginning or end of the offering period, whichever is less.
The glass ceiling is a concept referring to barriers that prevent minority or otherwise disadvantaged groups from being promoted into managerial and executive positions. It’s called the “glass” ceiling because the barriers these groups encounter are real (de facto) but easy to overlook or deny the existence of because they are not sanctioned by principle or policy (de jure). The phrase was originally coined in reference to the difficulties women face in the corporate workplace, but the meaning has since expanded to encompass other minority groups.
A retention bonus is a lump sum payment offered to a top-level or key employee as an incentive to remain with a company. This type of bonus is often issued in extraordinary circumstances, like during restructuring or a particularly demanding project, as a way to ensure the company keeps the resources it needs to complete the undertaking. Employers may also offer retention bonuses to employees they cannot afford to be poached.