Executive Cash Bonuses Rise 48%

The top executives in America received a 48.2% increase in their average annual cash bonus and were paid 31.2% more total cash compensation, according to the November 2006 Executive Compensation Index figures released by the Economic Research Institute and CareerJournal.com, The Wall Street Journalís executive career guide. These findings are calculated from year-to-date reporting for 2006 compared to the year-to-date in 2005.

The November 2006 Index indicates that while base pay decreased slightly, higher bonuses resulted in an average total cash compensation per executive of $4,795,096 (a 31.2% increase over 2005.) The previous yearly high of $3,683,131 total cash compensation was set in 2001, prior to 9/11. Average compensation for these top executives dropped in 2002 but has increased each year since then.

The Total Cash Compensation Index reflects data from a representative group of 45 publicly-traded companies randomly selected from the approximately 6,500 companies that report compensation data to the Securities and Exchange Commission (SEC). The Index has tracked pay for the highest paid executive in this group of companies since 1997.

Base Salaries
For the highest paid executives, the average base salary stands at $1,273,978 compared to Year 2005 base salary levels of $1,277,944. This reflects a 0.31% decrease in base compensation.

Annual Bonus
For the highest paid executives, the average annual cash bonus is $3,521,615, compared to prior Year 2005 cash bonus levels of $2,375,615. This reflects a 48.2% increase.

Total Cash Compensation
For the highest paid executives, the average total cash compensation (base bonus) is $4,795,096 compared to Year 2005 total cash compensation of $3,653,559. This reflects a 31.2% increase in total cash compensation over 2005 levels.

Total Cash Compensation Change Since 1997
The November 2006 Average Index of Total Cash Compensation stands at 205.1, using the 1997 level as a base of 100.0. Since 1997, the Total Cash Compensation for the highest paid executives has increased 105.1%.

Compensation and Revenue Changes Since 1997
The Average Index of Corporate Revenue is 216.4, using the 1997 level as a base of 100.0. Since 1997, the Average of Corporate Revenues has increased 116.4%. This compares to the increase of 105.1% in the Index of Total Cash Compensation.

A review of the year-to-year data shows a change in pattern between 1997 and 2006. Prior to 2002, compensation was rising at a faster rate than revenues, but in more recent years, executive compensation is rising more slowly than corporate revenues. The November 2006 Index shows a continuation of this trend in 2006.

The data also clearly illustrates a trend toward keeping base salaries relatively steady and providing additional compensation in the form of bonus payments. In fact, the average base salary for the top executives increased only 43.5% from 1997 to 2006, while annual bonuses increased 283.2%.

To view the complete report on the November 2006 Executive Compensation Index, please visit www.erieri.com and click on News Room at the bottom of the page.