This remains the foundation of all compensation and should be looked at closely, at least bi-annually, to ensure the base salary remains in alignment with peers and the growth of an institution. Base salaries are used, for the most part, to attract a qualified candidate to a position. Objectively, the salary should be reflective of the experience, tenure and education of the individual. However, intangibles such as motivation, progressiveness and overall attitude will also play a factor. Talent often reveals itself outside the boundaries of the traditional and must be compensated accordingly.
In general, we believe base salaries should be competitive with the Median of peers, the point where 50% make more and 50% make less. Because all other compensation is typically derived from base salary, if it is significantly out of alignment, it can exponentially affect Incentive Plan Payments and Total Compensation. Our definition of “competitive with the Median of peers” means that salary should fall between 85% – 115% of peer Median. To illustrate, if the peer median is $100K for a position, then an acceptable range for base salary, depending on the factors discussed above, would be $85K – $115K. That is not to imply that base salaries must fall within that range, but rather a guideline to help identify what would be reasonable.