Who Is Getting the Best Pay Raises?

March 20, 2017 by Paul Ausick

Source: Thinkstock
The highest-paid CEO last year was Thomas Rutledge of Charter Communications. He received total compensation of $98.6 million. Rutledge’s pay was presumably based on Charter’s return to shareholders, which came in at 42% according to a recent survey published in The Wall Street Journal. Not a bad year’s work, but not nearly as good as the 134% return at Netflix, which paid CEO Reed Hastings a measly $16.6 million.

Netflix returned more than three times as much value to shareholders and the CEO got one-sixth the pay as the most highly paid CEO among S&P 500 companies. The Wall Street Journal reported that CEO pay rose by 6.8% on average last year to $11.5 million.

How did non-CEOs fare last year? Average hourly wages rose by 2.9%, the best annual growth rate since 2009, not exactly in the same league with CEOs, either based on total pay or average growth. Could workers do better?

According to employment research firm Paysa, the answer is, “Probably, but employees have to ask.” The firm recently surveyed more than 2,000 employees and managers to find out, among other things, how much to ask for, when to ask for a raise and in which industries employees are most likely to be successful.

Nearly half (46%) of non-managers said no amount was too large to request, provided you believe the increase reflects your value as an employee. Only 29% of managers shared this view, however, and 39% responded that requesting an increase of more than 5% was too much. Only 27% of non-managers thought 5% was too high a raise to ask for.

More than a third of managers (35%) said that the best reason to ask for a raise was that you are doing excellent work. Another 25% said the best time to ask is when you’ve been assigned more difficult work, and 17% said a good time to ask is when you are being underpaid compared with others in your field.

And which industries are most amenable to granting your request? For women, 100% of requests for a raise were successful in both publishing and real estate fields. For men, the highest success rate (91%) was in the construction industry, followed by at 89% success rate in the agriculture, forestry, fishing and hunting industry.

The overall success rate, by gender, is also interesting. About 42% of women and 33% of men who asked for a raise were turned down. Overall, women fared somewhat worse even when raises were granted: 33% of women got the raise they requested compared with 36% of men; about 16% of women got a raise that was lower than they requested compared with 20% of men; and 9% of women got a raise of more than they requested compared with just over 10% of men.

Additional data and discussion of the results are available at the Paysa website.