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Despite improved results, bonus outlook gloomy for big companies Print E-mail
Wednesday, 09 December 2009

By Matthew Quinn

With the economy’s grip on a recovery rather tenuous, companies aren’t quite ready to start rewarding executives with big bonuses for improved results in 2009.

In a survey of 124 companies in the Fortune 500 by consultancy Empsight International, 31.0 percent of respondents expected to pay "somewhat" or "significantly lower" bonuses to executives in 2010 for 2009 performance. In contrast, 21 percent expected to pay executives "somewhat higher" bonuses, while only 7 percent expected to pay "significantly higher".

But while bonuses are still on the outs, there will be some modest improvement in salaries.

The survey found that average salary for all workers is expected to increase 2.78 percent next year. The pharmaceutical industry reported the highest total increase forecast at 3.9 percent, while the lowest reported forecast was in the insurance industry at 2.4 percent, Empsight said.

There’s good news on the salary freeze front. Only 1.7 percent are considering freezing salaries for 2010, while 31 percent are lifting a salary freeze. In a survey last year, 20 percent of respondents were considering salary freezes. Overall, 92 percent of companies expect that they will not have a salary freeze in place in 2010.

Hiring freezes are also expected to end next year. Among the 74 respondents that have implemented a hiring freeze, only 16 percent expect to continue the freeze, while 84 percent intend to end it next year, Empsight found.

That said, the hiring outlook remains bleak. More than half of respondents forecast no change in headcount, while 26 percent expect to cut versus 21 percent anticipating adding to payroll.

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