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May 15, 1988|JAMES BATES | Times Staff Writer

How did Jim Manzi, the 36-year-old chairman of Lotus Development Corp., make $26.3 million last year as head of the computer software firm? Was it as easy as 1-2-3?

What about Lee Iacocca? Last year, the Chrysler Corp. chairman took in $17.9 million, enough to buy one new Le Baron car every seven hours for an entire year. And how in Rambo's name did actor Sylvester Stallone manage to get the $12 million to $20 million he is reported to be making for his next picture?

Few questions are more baffling than how much money a person's work is worth. Granted, few people are in the same league with Manzi, Iacocca and Stallone and can relate to the bonuses, stock options and box-office percentages that launch their earnings into the stratosphere.

Still, who doesn't wonder how people make what they do, whether they are making as much as they should and why the guy a few desks away makes twice as much money for half the work?

The answers are never easy. Suggestions from employment specialists on how to get more money often solicit the same vague, frustrating suggestions high school guidance counselors offered years ago. Decide what job you want. Evaluate your experience. Take inventory of your skills.

On a more practical level, one of the first things to keep in mind is that you get what you ask for. And if you don't ask, you don't get.

"People are hesitant to talk to their boss or potential employer about their compensation," said Robert S. Rollo, managing director at Korn/Ferry International, the executive recruiting firm. "They will talk about almost anything else freely--their family, their children or their work content--but there is a mystique about compensation. If you hit it straightforward, you find out there is not a mystique."

Finding out what other people make can be tricky, but not impossible. Call trade associations and professional groups, which often publish salary surveys. Ask friends at work. Call workers at competitors to ask them what they make. Check the classified ads to see what is being offered. Call the union if it's a union job. Try college placement offices if you are just out of school.

Something important to figure out is whether you are in demand. If you're an engineer, you're in good shape. If you're a screenwriter, find another line of work. Ultimately, you want to decide whether someone else will pay you what you think you are worth if your boss won't.

Keep in mind that the market changes constantly. If you were a petroleum engineering graduate nine years ago in the wake of the 1979 oil crisis, you might have received a dozen job offers out of college. Starting salaries out of college were bid up past the $30,000 range. Some oil companies were so desperate, they gave workers an extra year's pay as a loan that would be forgiven if they stayed with the company for a few years.

But three years ago, in the middle of the severe oil slump, some petroleum engineering graduates weren't even getting job offers. The market has recovered some since then, with graduates from top schools in the profession typically getting two to five offers at an average of about $33,000 a year.

Location of the job is also important in determining what you should be paid. Locale often brings with it hidden costs that can turn what looks like a pay boost into what really amounts to a pay cut.

The two-story brick house with a basement in Aurora, Ill., doesn't cost anywhere near what the one-story stucco house with an orange tree in Santa Monica does, though heating costs much less in California because the weather is better. Freeway commuting can add $2,000 to $5,000 a year in costs. Parking fees also can add to a person's costs if the employee must pay them.

As important--and expensive--as housing can be, special compensation programs unfortunately are rarely available except to highly paid, specialized executives. "We're talking about the $120,000-a-year and above kind of executive," Korn/Ferry's Rollo said.

With some jobs, the difference in pay by region is dramatic for the same job. A director of human resources in Minneapolis might make $65,000 a year compared to $85,000 a year in New York. The cost of living in the nation's most expensive cities--Los Angeles, New York, San Francisco, Boston and Washington--should always be considered before relocating there.

Curtis Plott, executive director of the American Society for Training and Development in Arlington, Va., adds that companies in the South historically pay less, often much less, than companies do in areas where the cost of living is comparable. He also notes that pay for the same kind of job can vary substantially between industries, with high technology usually paying more, and insurance, retail and banking paying less.

How do you avoid feeling underpaid in the first place? Carl Jacobs, manager of the Los Angeles office of Sibson & Co., a consulting firm on executive compensation, suggests people should always prod prospective employers into providing specific details on what is expected of them and how they will be compensated for meeting the goals.

"Most happy marriages between an individual and an organization occur when the cards are laid on the table up front," said Carl Jacobs, manager of the local Sibson & Co. office. "Expectations are totally realistic on both sides and the person knows what is expected of him and the organization knows what to expect."

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