Abbott, Langer Association Surveys FAQ#6

QUESTION:  How do you define total annual salary, annual salary, incentive variable pay, direct compensation, and allowances & benefits?

Total Annual Compensation

The Total Annual Compensation is the sum of Annual Salary and Incentive Variable Pay.  For tax-exempt executive pay, it is the sum of Direct Compensation and Allowances & Benefits.

Annual Salary

The Annual Salary is the calculated wage and/or salary for a position divided by its weighted survey employment.  Annual salaries are straight-time, gross pay, and are exclusive of premium pay. Included are base rate, cost-of-living allowances, guaranteed pay, hazardous-duty pay, on-call pay, but not incentive pay, including commissions and production bonuses or rewards from variable pay plans and/or retirement or benefit plan matches.

Incentive Variable Pay

The annual Incentive Variable Pay includes annual bonuses, commissions, and production bonuses or rewards from variable pay plans.

Direct Compensation

Direct Compensation includes salary, fees, bonuses, and severance payments paid, along with payments of amounts reportable as deferred compensation. 

Allowances & Benefits

Allowances & Benefits include all welfare benefit plan payments, all other forms of deferred compensation and future severance payments, both taxable and nontaxable fringe benefits, expense allowances, and reimbursements that recipients must report as income.