Turn on economic news these days and it’s nearly impossible to miss stories about the tight labor market and (depending on how you measure it) moderate wage growth.
The chart below compares the Unemployment Rate and Average Hourly Earnings indexed to June 2009--the official end of the last recession.
Net-net, the unemployment rate has fallen by ~60% while earnings have increased ~30%.
We’ve been diligently working our way through our latest round of AE research and I wanted to share a preview of what I'm seeing. If the AE role were following the larger economy, we would expect to be seeing 2.5% compound annual growth in On-Target Earnings. In other words, a $100K OTE in 2009 should be roughly $124K today.
In reality what we're seeing is much, much bigger.
Account Executive compensation has seen dramatic and consistent increases over the last decade.
Take a look at the On-Target Earnings data below.
That’s a 52% increase since 2010 (nearly 5% compounded annually). Compare that to SDR compensation, which has been flat since 2010 when adjusting for inflation.
I wanted to dig into the data to see if this was truly a national trend, or if certain states were skewing the numbers. Here’s what I found:
|2015||$ 140||$ 92||$ 103||$ 132||$ 113||$ 102||$ 110|
|2017||$ 152||$ 125||$ 115||$ 140||$ 142||$ 107||$ 128|
|2019||$ 178||$ 162||$ 118||$ 153||$ 151||$ 118||$ 143|
AE compensation has risen everywhere.
Five years ago, when I thought about Account Executive compensation, I would think you've got California and the rest of the country. Over the last few years, my thinking shifted towards you've got the coasts and the rest of the country. Based on this analysis, my thinking needs to shift again.
It looks like we’re all California now.