Top executives are among the highest paid workers in the U.S. economy. However, salary levels vary substantially depending on the level of managerial responsibility; length of service; and type, size, and location of the firm. For example, a top manager in a very large corporation can earn significantly more than a counterpart in a small firm.
Median annual earnings of general and operations managers in May 2004 were $77,420. The middle 50 percent earned between $52,420 and $118,310. Because the specific responsibilities of general and operations managers vary significantly within industries, earnings also tend to vary considerably. Median annual earnings in the industries employing the largest numbers of general and operations managers in May 2004 were:
Computer systems design and related services $117,730
Management of companies and enterprises 99,670
Building equipment contractors 83,080
Depository credit intermediation 76,060
Local government 68,590
Median annual earnings of chief executives in May 2004 were $140,350; although chief executives in some industries earned considerably more.
Salaries vary substantially by type and level of responsibilities and by industry. According to a 2005 survey by Abbott, Langer, and Associates, the median income of chief executive officers in the nonprofit sector was $88,006 in 2005, but some of the highest paid made more than $700,000.
In addition to salaries, total compensation often includes stock options, dividends, and other performance bonuses. The use of executive dining rooms and company aircraft and cars, expense allowances, and company-paid insurance premiums and physical examinations also are among benefits commonly enjoyed by top executives in private industry. A number of chief executive officers also are provided with company-paid club memberships and other amenities.
Top executives held about 2.3 million jobs in 2004. Employment by detailed occupation was distributed as follows:
General and operations managers 1,807,000
Chief executives 444,000
Top executives are found in every industry, but service-providing industries, including government, employ 8 out of 10.
Nature of the Work
All organizations have specific goals and objectives that they strive to meet. Top executives devise strategies and formulate policies to ensure that these objectives are met. Although they have a wide range of titles-such as chief executive officer, chief operating officer, board chair, president, vice president, school superintendent, county administrator, or tax commissioner-all formulate policies and direct the operations of businesses and corporations, public sector organizations, nonprofit institutions, and other organizations.
A corporation's goals and policies are established by the chief executive officer in collaboration with other top executives, who are overseen by a board of directors. In a large corporation, the chief executive officer meets frequently with subordinate executives to ensure that operations are conducted in accordance with these policies. The chief executive officer of a corporation retains overall accountability; however, a chief operating officer may be delegated several responsibilities, including the authority to oversee executives who direct the activities of various departments and implement the organization's policies on a day-to-day basis. In publicly held and nonprofit corporations, the board of directors ultimately is accountable for the success or failure of the enterprise, and the chief executive officer reports to the board.
The nature of other high-level executives responsibilities depends on the size of the organization. In large organizations, the duties of such executives are highly specialized. Some managers, for instance, are responsible for the overall performance of one aspect of the organization, such as manufacturing, marketing, sales, purchasing, finance, personnel, training, administrative services, computer and information systems, property management, transportation, or legal services. (Some of these and other management occupations are discussed elsewhere in this section of the Handbook.)
In smaller organizations, such as independent retail stores or small manufacturers, a partner, owner, or general manager often is responsible for purchasing, hiring, training, quality control, and day-to-day supervisory duties.
Chief financial officers direct the organization's financial goals, objectives, and budgets. They oversee the investment of funds and manage associated risks, supervise cash management activities, execute capital-raising strategies to support a firm's expansion, and deal with mergers and acquisitions.
Chief information officers are responsible for the overall technological direction of their organizations. They are increasingly involved in the strategic business plan of a firm as part of the executive team. To perform effectively, they also need knowledge of administrative procedures, such as budgeting, hiring, and supervision. These managers propose budgets for projects and programs and make decisions on staff training and equipment purchases. They hire and assign computer specialists, information technology workers, and support personnel to carry out specific parts of the projects. They supervise the work of these employees, review their output, and establish administrative procedures and policies. Chief information officers also provide organizations with the vision to master information technology as a competitive tool.
Chief executives have overall responsibility for the operation of their organizations. Working with executive staff, they set goals and arrange programs to attain these goals. Executives also appoint department heads, who manage the employees who carry out programs. Chief executives also oversee budgets and ensure that resources are used properly and that programs are carried out as planned.
Chief executive officers carry out a number of other important functions, such as meeting with staff and board members to determine the level of support for proposed programs. In addition, they often nominate citizens to boards and commissions, encourage business investment, and promote economic development in their communities. To do all of these varied tasks effectively, chief executives rely on a staff of highly skilled personnel. Executives who control small companies, however, often do this work by themselves.
General and operations managers plan, direct, or coordinate the operations of companies or public and private sector organizations. Their duties include formulating policies, managing daily operations, and planning the use of materials and human resources, but are too diverse and general in nature to be classified in any one area of management or administration, such as personnel, purchasing, or administrative services. In some organizations, the duties of general and operations managers may overlap the duties of chief executive officers.
In addition to being responsible for the operational success of a company, top executives also are increasingly being held accountable for the accuracy of their financial reporting, particularly among publicly traded companies. For example, recently enacted legislation contains provisions for corporate governance, internal control, and financial reporting.
For a variety of information on top executives, including educational programs, certification programs, and job listings, contact:
American Management Association, 1601 Broadway, 6th Floor, New York, NY 10019. Internet: http://www.amanet.org
International Public Management Association for Human Resources, 1617 Duke St., Alexandria, VA 22314. Internet: http://www.ipma-hr.org
National Management Association, 2210 Arbor Blvd., Dayton, OH 45439. Internet: http://www.nma1.org
For information on executive financial management careers and certification, contact:
Financial Executives International, 200 Campus Dr., P.O. Box 674, Florham Park, NJ 07932-0674. Internet: http://www.fei.org
Financial Management Association International, College of Business Administration, University of South Florida, 4202 East Fowler Ave., BSN 3331, Tampa, FL 33620-5500. Internet: http://www.fma.org
Parts reprinted from: Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2006-07 Edition, Top Executives, on the Internet at http://www.bls.gov/oco/ocos012.htm (visited March 24, 2006).