Half of U.S. companies will be freezing base salaries in 2009 – and a number of those will be Colorado-based.
The results of a survey released this week by Grant Thornton LLP indicated that about 50 percent of U.S. companies will freeze base salaries in 2009, with another 15 percent planning to implement salary reduction programs in the coming months.
Of the 227 U.S. companies surveyed from January 26 to February 13, the largest groups came from the manufacturing, financial services, banking, not-for-profit and retail/trade sectors. Almost half (48%) of the respondents were for-profit, publicly traded companies, while 39 percent were privately held companies and the remaining 13 percent of companies consisted of non-for-profit, governmental, ESOP, partnerships and others. Seven in ten companies had revenues below $500 million and 30 percent of respondents above $500 million.
“Colorado companies are expecting a challenging year for growth and financial stability,” said Jim Burton, Managing Partner at Grant Thornton’s Denver office. “In just the first quarter alone, we have seen leading companies cut executive compensation and bonus programs as a way to reduce expenses and meet demands,” he said.
Sixty-nine percent of companies are paying out 2008 bonuses below targeted levels, with more than a quarter not rewarding bonuses at all for 2008. Looking forward, companies report that 2009 bonus budgets will be the same — or lower — than 2008.