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Survey: Tech Executives Saw More Pay in 2011, Life Sciences Inched Up

Xconomy National — 

[Updated 1:45 p.m. ET] Executive compensation held relatively steady in 2011 among privately-held life sciences companies, while their peers in the technology sector continued to see salary increases, according to the annual CompStudy survey produced by executive search firm J. Robert Scott and law firm WilmerHale in collaboration with Noam Wasserman, associate professor of business administration at Harvard Business School.

The survey analyzes year-to-year compensation changes across ten different executive positions in life sciences and technology. It includes compensation data from 575 technology firms and 225 life sciences companies from across the United States. While the technology sector continued to report moderate salary increases in 2011, momentum eased for the life sciences sector. “In life sciences, there was not a real slowdown through the economic downturn,” says Aaron Lapat, managing director with J. Robert Scott in Boston.

That may be changing. Lapat says executive compensation in the life sciences sector only increased by 1.45 percent over 2010. “There is something hitting the life sciences market that hit tech a few years ago,” Lapat says. Prior years saw annual changes in executive compensation for the life sciences sector of between 3 percent and 7 percent, he says. In 2011, non-founder CEOs in life sciences earned average base salaries of $304,000 according to the survey, up from $295,000 in 2010.

The technology sector, by contrast, seems to be finding its stride. The 2011 results showed a 3.7 percent increase compared with executive compensation in 2010 for the technology sector. “In tech, we’ve come off the bottom of the market,” Lapat says. “We’re seeing that reflected in compensation movement.” According to the survey, non-founder technology CEOs brought in average base salaries of $242,000 in 2011, up from $233,000 in 2010.

Based on the survey’s history, Lapat says the increases among executive salaries for the technology sector are not insignificant. In the twelve years the survey has been conducted, the previous greatest change in the technology sector was between 1999 and 2000 when the results showed a 7.9 percent increase. The lowest change was between 2008 and 2009. “It was virtually zero,” he says.

Lapat expects executive compensation increases to continue this year for the tech sector and, based on historical data, believes there will be some gains for life sciences. But, he adds, “I don’t think we’re going to see anything dramatic in 2012.”

Quashing some East Coast vs. West Coast rivalry chatter, Lapat says historic data from the survey showed that geography had little effect on how senior executives in technology were compensated. Headcount, number of funding rounds raised, and revenue had more influence on executive compensation, he says. “[Geography] does have statistical relevance but it almost has none,” he says. “When you look at all the data across the years, there is no consistency.”


[All information below includes data on founder and non-founder salaries]

Technology CEO mean base salaries by sector in 2011

Software: $204,800

Communications: $211,700

Hardware/Semiconductors: $197,900

IT Services/Consulting: $234,500

Digital Media/Content/Information: $203,200

Cleantech: $215,600


Life Sciences CEO mean base salaries by sector in 2011

Therapeutics: $296,200

Devices: $253,500

Tools/Instrumentation: $235,000

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