New surveys focus on US internet industry


New surveys focus on US internet industry

Internet companies across the Atlantic are now employing more creative executive compensation packages, but there are some signs that hiring and retention bonuses are less in vogue than a year ago. These are some of the key findings to emerge from two recent studies of the industry by Buck Consultants and PricewaterhouseCoopers.

Survey 1: Unifi Network — a division of PricewaterhouseCoopers LLP

  • To attract and retain talent , online companies are rewarding top executives with aggressive cash and equity compensation packages.

    Executives saw annual bonuses increase by 82% at the median in the past year. This increase demonstrates that some internet companies are tying pay to performance through variable pay bonus programmes to drive an organisation's top and bottom line performance, said Edward Speidel, a director in Unifi Network's compensation practice.

  • Equity continues to be a significant component of executive pay packages.

    Although the value of executives' option holdings has declined substantially, the number of shares held by executives have increased.

  • As the internet industry matures , more and more traditional executives are filling senior positions.

    As a result, roles and compensation packages are becoming more traditional . New economy companies are learning from traditional companies as far as using performance metrics tied to an organisation's strategic goals, said David Hofrichter, a Unifi Network principal. Internet companies are restructuring their compensation programmes to motivate their executives, just as traditional companies are learning to include more employees at all levels with a variety of compensation tools.

Survey 2: Buck Consultants

  • The nation’ s economic slowdown has left web employees short on the stock options and signing bonuses that once fuelled the dreams of would-be Internet millionaires .

While web site employees’ total cash compensation has increased by between 6% and 8% since 2000, added incentives, including signing bonuses, have decreased in popularity.

The paychecks are getting bigger for these employees, but the bells and whistles are slowly evaporating from their total compensation package, said Paul Gavejian, Buck's principal and compensation consultant. Alternative pay structures, such as stock options and project completion bonuses, are less in vogue than they were just one year ago. So while web site employees are bringing home more cash each week, they generally have fewer ‘ extras’ to look forward to.

Alternative pay strategies . . .

  • 64% use hiring bonuses as a pay strategy compared with 69% a year ago.

  • 25% award retention bonuses, down from 35%.

  • The popularity of broad-based stock options fell to 36% from 41%.

  • Project completion bonuses are offered by 29% of companies surveyed, a slight fall from the 31% that offered them in 2000.


Want to know more?

Survey 1: Unifi Network

Title: Internet Compensation Survey: 2001, by Unifi Network, a subsidiary of PricewaterhouseCoopers LLP.

Survey sample: The analysis is based on information from 98 public internet companies in the US.

Availability: For additional information contact Ted Barna, Unifi Network, tel: 001 201 530 2021 or email:

Read the press release online at . . .

Unifi Network, is a division of PricewaterhouseCoopers . . .


Survey 2: Buck Consultants

Title: Web Site Compensation Survey, Buck Consultants.

Availability: Contact the compensation survey department, Buck Consultants, 500 Plaza Drive, Secaucus, New Jersey 07096-1533, USA, tel: 001 201 902 2555, or email:

Survey sample: The 2001 survey examined compensation practices of 245 employers from nine industries. The study reports on salaries of 45 web site-related positions, up from 42 a year ago.

Read the press release online at . . . ID=261

For more information about Buck visit . . .

Posted 24 August 2001