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Bigger Raises for Executives

October 05, 1986|DONALD WOUTAT

Southern California executives are in line for 1987 pay hikes about a percentage point higher than their counterparts elsewhere, according to compensation expert Hewitt Associates of Chicago.

Hewitt's survey of a small number of Southland companies suggests that their executives can expect salary hikes of 6.4% next year versus a national average of 5.4%.

This has been going on for several years, according to Margaret Bentson, manager of the direct-compensation group for Hewitt's western regional office in Santa Ana. It's a function of higher living costs and the generally good economic health of California.

"California in particular and the West Coast in general have been extremely economically healthy compared with some other parts of the country," Bentson said. "It's not so much that we're so far ahead of the game, but the comparison with the Midwest and its industrial problems has made the contrast greater."

Nationally, for executives and all other white-collar employees, Hewitt's survey--which doesn't take into account bonuses or other extra compensation--showed that this year's increase will be 5.3% and next year's, 5.1%. In the West, the figures will be about 5.6% and 5.3%.

As a rule, the higher the managerial ranking and the bigger the company, the bigger the raise.

But a separate survey of pay and bonuses for chief executive officers at small and medium-sized companies indicates that the smaller outfits aren't exactly cheap, especially on the West Coast.

Base salary increases for CEOs at smaller firms have averaged 7.3% while bonuses bring the total compensation increase to 8.3% this year, almost three times the current rate of inflation, according to Growth Resources Inc. of Peabody, Mass.

West Coast CEOs do the best, followed by those on the East Coast and then the central United States, the study found. And urban chief executives are doing 8% better than their rural counterparts.

However, Growth Resources President Richard J. Bronstein said regional differences "have narrowed during the past three years as some of the major manufacturing industries concentrated in the central United States have recovered."

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