Compensation Research Project 2000-2006

Completed by Devon Smith

March 9, 2007

Description of Project

PROBLEM:

Budget Level III LORT Theatre needs to hire new staff members, but doesn’t know how much it should pay them.

AUDIENCE:

Board of Directors

Questions to Answer

• What jobs do other theatres our size have?• How many administrators work in other theatres

our size?• How much should we pay a new employee?• What are the trends in compensation we should

know about?• Should we create a formal compensation plan?• What are other sources of information we can go

to for information?• What are our next steps?

Work Plan

• Description of Question• Creation of Work Plan• TCG Salary Surveys 2000-2006• Acquire background information sources• Acquire sample compensation materials• Acquire sources for Executive Compensation Trends• Acquire non-profit compensation surveys• Acquire list of additional compensation survey options• Draw conclusions• Assemble information• Present data• Determine next steps

Sources of Information

• Theatre Communications Group• Society of Human Resource Managers• Economic Research Institute• O*NET Occupational Information Network• Bureau of Labor Statistics• Internal Revenue Service• Guidestar• Charity Navigator• Chronicle of Philanthropy• Salary.com• Non Profit Times• Americans for the Arts• Lecture notes of Vandra Huber, Compensation Specialist

Next Steps

• Further analysis of TCG Salary Surveys• Distribution of survey questions to similar

theatres• Tabulate data acquired through survey

questions• Create job descriptions for each position• Complete Hay Point System Evaluation• Formal review of compensation articles• Formal review of national compensation trends,

industry wide• Acquire additional compensation surveys (?)

Contents of Binder• Research project process• Basic knowledge of compensation definitions and issues• Salary graphs and trends from TCG surveys• White papers on compensation topics• Best practices in compensation• Sample job descriptions• Sample organizational charts• Sample compensation plan• Employment trends• News articles on Executive Compensation (pay compression)• Compensation surveys• List of Available compensation surveys

Challenges

• No access to primary data points

• Unclear standardization of job descriptions

• Intense data entry

• Distribution of salary survey questions

• Non profit arts is a relatively small industry

• Poorly defined question

Interesting Finds• Maximum salary of Development Directors has risen dramatically• Maximum salary of Operations Manager has decreased

dramatically• Median salary for Finance Director has risen nearly 30% in 5 years• Median salary for Managing Director has risen only 10%• Managing Directors continue to have much wider salary ranges

across all budget groups compared to other positions• Salary ranges have become significantly more narrow for

Telemarketing Managers, Managing Directors, General Managers, and Operations Managers

• In 2006, Managing Directors have on average been on the job for 9 years, Marketing Assistants and Associate Development Directors have on average been on the job only 2 years

• Budget Group I lower level managers tend to be paid higher than average (most likely taking on additional duties in the absence of higher management).

Executive Compensation Ratios:

• Spiked in 2005 for Budget Group I and seem to be on the way down

• Continue to rise for Budget Group II• Spiked in 2005 for Budget Group III and then

turned sharply down• After a 2 year significant downward trend in

Budget Group IV, are now increasing steadily• Remain fairly constant for Budget Group V• Trend slightly upward for Budget Group VI

Questions?