New York, NY – A financial ice age has descended on the U.S. business media sector, according to a survey by American Business Media (ABM) that found 80% of its member companies had frozen salaries and a third instituted pay cuts.
The survey also revealed that nearly three-quarters of media companies – many of which also organize trade shows, conferences and other live events – had also cut staff, expenses and employee benefits in response to the economic storm. The majority of companies surveyed, in fact, stated their total personnel costs for 2009 alone would be chopped up to 15%.
“Nobody in their right mind is going to just sit back and ride this out,” said ABM President/CEO Gordon Hughes. “They are all looking for ways to continue to employ the most people they can. They won’t disturb the value proposition of their platforms; they are going to protect their franchises.”
Lighter Pay Checks
The results of the survey, which was conducted for ABM by Towers Perrin, indicated that the burden was falling on all levels. Among the companies that reduced worker pay, 22% said those cuts would be permanent.
Those workers are presumably better off than those who have been told to clean out their desks. Headcount reductions had been undertaken by 70% of the companies that responded while another 73% had frozen or reduced hiring.
Senior executives, meanwhile, could apply the current sentiment that “flat is the new up” to their bonuses.
- 25% of companies said they reduced the number of employees receiving annual bonus checks.
- 16% reduced the number of employees receiving long-term incentives based on cash or stocks.
- 29% of companies did not pay bonuses for 2008 performance.
- 12% cut 2008 bonuses by half or more.
- 29% indicated their bonuses would be about the same as they were the year before.
- 0% indicated their bonuses would increase.
Another Round of Cost Cuts
The vast majority of companies have also been whittling down their costs. The survey said 70% scaled back their company events and 78% cut business travel and entertainment.
Nearly Real-Time Snapshot
Whether or not the trend would continue into next year was not explored in the survey. The poll was, however, meant to reflect the current conditions in a market where the consensus has been that a recovery will come in 2010 at the earliest . “It tells you what has been going on in the immediate past, what is going right now and, presumably, what will continue on for the rest of the year,” said Mark Rothman, chief marketing officer at ABM.
Companies that took part in the survey can obtain the full results by contacting Rothman at (212) 681-1106.
ABM will consider at a later date whether or not to poll its members again about their compensation situations. Hughes said having up-to-date data was a vital asset to the leadership of a beleaguered company facing unprecedented times. “When the industry was growing and had nice robust numbers, it was fairly easy to show what happened last year and repeat it with a 3% increase,” he said. “This is not the time for that.”