Check your paycheck.
If you are in the apartment industry, chances are that, whatever your job, you saw less of a merit raise this year, according to the National Multi Housing Council's seventh annual National Apartment Survey of Compensation and Benefits Practices released earlier this fall.
Even if you're a CEO, you saw your total compensation drop from a median $500,000 last year to $414,000 this year. But if you work as a top construction executive, you bucked the trend and made a median of $219,000 this year compared to a total compensation of $183,500 last year.
Elizabeth Feigin Befus, the director of property operations for Washington, D.C.-based NMHC, says it is difficult to characterize the salary movement since this is only the second year the council has collected corporate pay data. "However, it appears that the greatest total compensation increases occurred among top business development and construction executives," she says. "On the other end of the spectrum, the greatest drops in total compensation registered among the CEO, CFO, regional executive, and property management executive positions." Of course, you may be receiving that bigger (or smaller) paycheck from an entirely different company than you did in 2005. The turnover rate among multifamily companies also increased this year, according to the apartment-specific survey on salary and bonus/incentive pay, which is based on reports by 101 leading apartment firms who employ a total of 45,000 people.
Smaller Raises As the apartment market strengthens, many multifamily leaders say they are optimistic about the apartment industry and salary trends.
"I haven't seen any cases of salaries going down," said Tony Rossi Sr., president of Chicago-based RMK Management Corp., an apartment management company that oversees more than 7,500 apartments in Chicago. He credits the condominium conversion market, that has keep the multifamily industry strong in Chicago as well as a company philosophy that supports strong raises and bonuses as the key to maintaining solid employee base. "We always like to get the best people we can find," Rossi says. "We are looking for a high-quality person who is above the market because you get paid back in the long run."
Other top executives agree. "We are seeing our internal increases being higher than in years past to keep good people," says Terry Danner, CEO of Riverstone Residential Group, which manages more than 60,000 apartments nationwide. "We don't want to increase turnover rates. It's hard enough to get good people. You have to keep them."
The survey found that raises for senior executives at the vice president level are expected to average 3.8 percent this year, down from 4.2 percent last year. Employees below the vice president level can expect an average 3.6 percent merit pay raise, also down from 4.1 percent in 2005. Non-exempt employees, such as leasing consultants and maintenance technicians, should expect the smallest salary bump, 3.4 percent this year compared to 3.7 percent in 2005.
Pay Surprises The survey also compared which jobs received the biggest overall increase in salary and total compensation packages. The biggest jump in total compensation went to top investment executives, who reported a 20 percent increase, followed by top construction executives, who enjoyed a 19 percent raise. COOs came in third with a 13 percent rise in total compensation.
"Expectations have increased in construction executives, operational vice presidents, development associates, and other top executives," agrees Julie Blank, director of asset management for Alliance Residential Co., which in 2005 started more than 4,200 apartments and owned more than 37,000 units. "The qualified employee pool for these positions seems to be shrinking."
Meanwhile, CEOs suffered the biggest drop–17 percent–in median total compensation from 2005. Top property management executives came in second with a 14 percent drop, which was followed by chief information officers, who reported 11 percent less in total compensation than last year.
For median base salaries, those working as top construction executives fared better than CEOs again, garnering a 13 percent increase while CEOs saw a 6 percent decrease in their paychecks. Top investment executives did well this year, reporting a 6 percent raise while COOs and top human resource executives each brought in 5 percent more than in 2005. But median CFO pay plunged by 11 percent pay this year while those working as a CEO/president–subsidary saw 8 percent less. The differences in positions and pay this year can be credited to market competitiveness for certain positions, according to Befus. "The fewer accomplished professionals going after key positions increases that competition and can influence compensation levels," she says.