Study shows US tech salaries are down, first since 1985

SAN FRANCISCO: Salaries for the highest-paid bracket of IT managers have

fallen for the first time since 1985, according to a new survey. Benchmark

salaries for chief information officers at large companies are down nearly 37

per cent from last year, according to the survey released on Monday by

management consulting firm, Janco Associates.

By the same measure, which is intended to capture the average pay on offer

for top-performing executives, salaries for CIOs at medium-sized companies were

down 31 per cent, M Victor Janulaitis, chief executive officer of Janco

Associates, said on Tuesday.

Although the survey only looked at information technology managers, the trend

is much broader, he said. "Executive level salaries are decreasing across

the board because they're so tied to the stock market and to the company's

performance," Janulaitis said.

The worsening economy is driving down corporate earnings and lowering

performance-based bonuses that have historically been used to reward top

executives. Large companies are freezing hiring and extending the periods

between normal salary increases, while others are outsourcing Internet functions

rather than paying people to manage them in-house, he said.

Janulaitis expects that California's energy crisis will also have a negative

impact on executive salaries down the road as companies are forced to take even

more drastic measures, such as moving out of state or cutting salaries, to

offset higher energy cost.

"There's a strong indication that even if the economy turns around in

the third or fourth quarter, a lot of these positions will not recover as

rapidly as before. People won't go out and spend money on IT professionals and

new software upgrades," he said.

While top technology positions have being adversely affected by the slowdown,

the survey found that certain positions dealing with newer technologies like

Java and e-commerce applications were actually seeing small increases in the top

pay offered. The survey conducted by Park City and Janco included information

about positions of 70 tech executive in the US and Canada.

(C) Reuters Limited 2001.