Salaries and bonuses down but IR consultants expect growth in 2013

IR advisors are optimistic that the coming year will bring higher revenues, after average salaries fell slightly from $160,000 in 2009 to $158,895 last year.

Cash bonuses are expected to fall from an average $42,000 last year to $30,000 in 2013, however. The number of IR consultants taking home a cash bonus also fell from 61 percent in 2009, when NIRI last conducted its Compensation for IR Counselors survey, to 41 percent last year.

This hasn’t dampened industry optimism though, with more than three-quarters (77 percent) of respondents anticipating growth in 2013. Back in 2009, 25 percent expected revenues to remain flat.

In a situation ‘similar to corporate IROs,’ NIRI adds that average salaries vary depending on the region. ‘Those IR consultants working in the Mid-Atlantic region currently have the highest median base salary,’ earning an average $187,000, according to the report. Those in the Pacific area bring in an average $170,000, while those outside the US receive far less with an average salary adding up to $90,349.

IR consultants do receive a number of added benefits that top up their base salaries though. As well as cash bonuses and equity, the most popular benefit is health insurance, received by 46 percent of respondents, with cars, club memberships and long term incentive plans also featuring.

As well as location, NIRI says that a number of other variants affect compensation. In addition to larger firms offering larger average salaries, ‘median base salary also had a moderate positive correlation with total number of industries worked, number of years with IR firm, and a strong positive correlation with number of years IR experience,’ explains NIRI.

Consultants with just one to two years’ experience in IR received an average base salary of $70,000, rising to $150,000 for seven to 10 years and topping at almost $195,000 for those with 21 to 30 years in the profession.

NIRI’s research also notes a slight increase in the number of IR consultants coming from an analyst background. ‘Although the vast majority of IR counselor respondents (85%) have never worked as a sell or buy side analyst during their career, that percentage has decreased by five points since the question was asked in 2009,’ explains the report. Instead, a third gained most of their professional experience in corporate IR, while 25 percent have worked primarily as an IR consultant.