Purchasing pros beat inflation

Salaries increase by 5% in 2003, helped by an 8% push in women's earnings.

By Susan Avery -- Purchasing, 12/11/2003

After a year when salaries barely kept pace with earnings of the year before, purchasing professionals received a much-needed pay hike.

The average annual salary of respondents to PURCHASING magazine's 23rd annual salary survey is $67,300, a 5% increase ($3,000) over last year's average ($64,300). In 2002, earnings power rose by just 0.5%.

This year's median salary, $60,000, was $3,500 greater than last year's median ($56,500), and a 6% increase.

Results of the 2003 salary survey reflect the range of purchasing professionals who make up the readership of PURCHASING magazine. Annual salaries of this year's respondents vary, from $20,000 to $590,000; a full complement of responses was received from men and women filling all job titles from buyer to purchasing vice president; and every region of the country, every commodity, and every industry is represented. Additional highlights of this year's report:

• The purchasing profession's average salary has increased 113% since PURCHASING began surveying its readers in 1983 and 46% over the past ten years. The average salary reported in the 1993 Salary Survey was $46,100. The change in median salary over time was consistent with the change in average salary—46% over 10 years, 111% over 20 years.
• Slightly more than half of all survey participants receive bonuses as part of their annual compensation, back up to the level in 2000 and 2001. The average bonus among those who are compensated in this way is 9.8% of base pay, a slight 0.4% decrease from last year (10.2%).
• Fifteen percent of respondents receive stock options, slightly less than in 2002 (17%). The average value of these options is $54,000, including the almost 15% of respondents having stock options with no value.

Senior executives—including purchasing vice presidents, purchasing and materials directors, materials managers, purchasing managers—are the most likely to receive bonuses. Half or more of respondents filling each of these job titles received a bonus as part of their compensation package. Bonuses received by senior executives generally represent a greater proportion of their overall compensation than bonuses received by less senior employees. The average percent bonus among purchasing and supply vice presidents or chief purchasing officers, for example, is nearly 25% of base pay; the average among buyers who receive bonuses is 6%. Consistent with seniority, bonuses are most common among purchasing executives with the greatest supervisory and dollar volume responsibilities.

Top earners

This year's analysis of salary according to job title spans a range of $112,600 from the lowest to highest average salary. The average compensation for buyers is $42,400; the average for purchasing or supply VPs is $155,000. A VP of purchasing in the energy/mining/utilities sector reported this year's highest individual salary, $590,000, followed by a materials manager at $390,000. (A profile of the top earners is included in the $100,000 Club sidebar.)

A purchasing executive's professional responsibilities serve as a benchmark of his or her compensation. As dollar-volume and supervisory duties increase, so does income. The break point for higher-than-average earnings in this year's study is with more than $25 million in annual purchasing. Purchasing officials responsible for less than this amount of annual buying typically report compensation close to average or less than the average for the profession as a whole; those who purchase at this level and above enjoy better-than-average salaries.

Similarly, as supervisory duties increase, so does average pay. Salary survey respondents without supervisory responsibility earn less than average salaries; the proportion of employees with no oversight responsibility remains the same as last year.

The best compensated commodities for purchasing executives, according to this year's salary survey, were services ($90,000), machinery ($86,900) and information technology ($85,400).

The industries reporting the highest average purchasing salaries are the same as last year, albeit in a slightly different order: computers and related equipment ($88,200), energy/mining/utilities ($84,700), financial and services ($80,900) and process industries ($75,200).

Longevity counts

As in the past, the age threshold for better-than-average compensation coincides with the average age of the profession. The average age of this year's survey respondents is 45.8 years; the average salary among respondents 41-50 years old is $72,100.

Also consistent with previous salary survey results, longevity bolsters average compensation in the purchasing profession. Average purchasing salaries increase in step with length of employment. Moreover, purchasing executives don't begin earning higher-than-average salaries until they have been in the profession for more than 10 years. Prior to this milestone, average compensation is less than the average for the profession. The average and median tenure in the field is 15 years.

Seventy-three percent of all participants in this year's survey have a college degree or certificate. College graduates fill the highest ranking purchasing positions, have the greatest purchasing responsibilities, work for the largest companies and generally earn the highest average annual compensation. Generally business degrees and graduate MBA programs are stepping-stones to higher salaries. The average annual salary rose 4% among both college and noncollege graduates to $72,200 and $52,800, respectively. The group of seven executives with dual graduate degrees has the highest average salary of all respondents to the survey, $107,700.

CPMs make more

Proportion of this year's survey participants, who are Certified Purchasing Managers (CPM), increased to 24%. As in the past, CPMs have higher average salaries than purchasing professionals who are not certified. This year's average compensation for purchasing executives with certification is $80,000; the average for those without certification is $63,200. Certified purchasing managers, on average, have five years more experience than those who are not certified.

APICS —The Educational Society for Resource Management (formerly American Production and Inventory Control Society) granted CPIM certification (Certification in Production and Inventory Management) to 7% of the purchasing professionals responding to this year's salary survey. The greatest incidence of CPIM is among materials managers; 13% of materials managers hold this certification. The average salary of CPIM -certified materials managers is $78,200, for noncertified materials managers, it is $73,600.

Average purchasing salaries increase in step with company size. The threshold for average and above compensation is $51 million to $125 million in annual sales: Purchasing professionals employed by companies having more than $50 million in annual sales report better than average compensation; those working at smaller firms are more likely to receive less than average pay. Overall, a difference of $42,500 separates the average salaries of purchasing executives employed at the largest and smallest companies in this year's salary survey. There is also an employment gap between men and women with respect to company size. A higher proportion of women are employed at smaller firms than men (61% women vs. 47% men); 36% of men are employed at firms with sales over $500 million, whereas 22% of women work in companies of that size.

Plants pay less

When pay is examined according to organizational unit, the average salary for purchasing professionals working at the divisional level is higher than those at the corporate level. The average salary for purchasing executives working at their company's divisional offices is $76,600, whereas the average pay for purchasing professionals assigned to corporate headquarters is $72,200. A higher percentage of those working at the corporate level are employed by smaller companies than those working at the division level. Conversely, a higher percentage of purchasing employees at the divisional level work at the biggest companies than do corporate or plant-level purchasing professionals. Plant locations offer purchasing men and women the lowest average salary of the three organizational assignments ($54,800).

New England leads regionally in the U.S. for average compensation ($74,400), followed by the Mid-Atlantic ($70,500) and Southeast ($69,300). Variation among regions is not high. The range of average pay varies by $14,300 between the lowest and highest-paying continental U.S. areas. Purchasing professionals in the Western states have made the most gains in the past two years, experiencing 10% increase. The Southeast region increased 9%, but last year the average pay there declined slightly. Respondents from Canada—a relatively small sample of 10—are lower paid than in the past couple of years.

Men continue to report higher average salaries than women ($73,400 versus $53,900). Still, women's compensation increased by 8% compared to a 3% hike for men.

Tale of the tape

	Average	Median
Salary	$67,300	$60,000
Age	46	46
Years experience	15	15
SOURCE: PURCHASING

Stock options vs. job title

Title	Receives stock options	Avg. value* (thousand $)	Median value* (thousand $)
Buyer	11%	7.4	3.0
Senior buyer	12%	5.4	2.5
Purchasing agent	11%	233.8	9.4
Purchasing manager	14%	19.2	6.0
Asst. purchasing manager	9%	—	—
Materials manager	12%	25.0	15.0
Purchasing/materials director	34%	74.8	25.0
Vice president purchasing	39%	126.6	32.5
*Average includes those whose stock options have no value. Values are rounded to the nearest hundred dollars. SOURCE: PURCHASING

Salary vs. education

Degree	Average salary (thousand $) All	Average salary (thousand $) Men/Women	Highest salary (thousand $) Men/Women
No degree	52.8	58.5/46.0	165.0/163.0
Undergraduate degrees	68.3	72.3/56.9	390.0/590.0
Associates degree	*60.5	*69.5/51.5	112.0/54.0
Liberal arts	65.3	70.8/51.5	390.0/88.0
Business	69.0	72.7/59.4	250.0/590.0
Technical	70.9	73.9/49.8	234.0/124.0
Multiple undergrad degrees	55.2	56.4/*52.3	99.0/65.0
Graduate degrees	83.5	90.0/63.8	279.0/165.0
MBA	91.9	94.8/78.6	273.0/165.0
Other graduate	64.9	75.8/52.0	279.0/140.0
Multiple grad degrees	*107.7	*113.7/#	185.0/72.0
* = Fewer than 10 respondents. # = One respondent only. SOURCE: PURCHASING

Salary vs. commodity

Commodity	Average salary (thousand $) All	Average salary (thousand $) Men/Women	Highest salary (thousand $) Men/Women
Metals	$61.0	66.7/48.8	220.0/163.0
Chemicals	72.2	80.1/53.1	250.0/130.0
Electronics	65.1	70.7/53.8	215.0/175.0
Packaging	71.8	81.1/54.9	250.0/121.0
Components	63.3	69.0/50.3	230.0/140.0
Machinery	86.9	84.5/95.2	234.0/590.0
MRO	62.4	67.8/50.3	130.0/96.0
OfficeEqpt./supplies	54.0	*79.8/*39.7	125.0/71.0
Transport/freight	80.4	*90.2/*36.0	185.0/45.0
IT	85.4	89.1/*75.9	273.0/140.0
Services	90.0	95.5/78.5	390.0/165.0
Multiple Commodities	63.8	69.5/53.3	279.0/120.0
# = Only one respondent. * = Less than 10 respondents. SOURCE: PURCHASING

Salary vs. age

Age	Average salary (thousand $) All	Average salary (thousand $) Men/Women	Highest salary (thousand $) Men/Women
20 to 24 years	37.8	*43.0/35.2	57.0/55.0
25 to 29 years	45.5	47.9./37.3	80.0/64.0
30 to 34 years	54.3	60.5/47.1	125.0/130.0
35 to 40 years	61.9	68.2/51.9	160.0/110.0
41 to 50 years	72.1	77.2/61.0	390.0/590.0
51 to 60 years	72.9	79.5/53.2	279.0/175.0
61 years and older	69.4	72.9/43.9	234.0/64.0
*Less than 10 respondents. SOURCE: PURCHASING

Salary vs. industry

Industry	Average salary (thousand $)
Computers and related equipment	88.2
Energy/mining/utilities	84.7
Financial, services	80.9
Process industries (chemicals/paper/food)	75.2
Transportation/automotive	70.0
Electronics	68.6
Wholesale, durable goods, service centers	64.3
Industrial controls/instruments	63.5
Equipment/machinery	62.2
Miscellaneous manufacturing	61.6
Primary metals and metals fabricating	60.2
Communications equipment	59.2
Multiple sectors	59.8
SOURCE: PURCHASING

Two year change in salary according to job title

Title	2002	2001
	Two year change (self-described)
Buyer	-4%	4%
Senior buyer	5%	6%
Purchasing agent	7%	4%
Purchasing manager	2%	2%
Asst. purchasing mgr.	-7%	-16%
Materials manager	6%	8%
Purchasing/matl.dir.	-5%	6%
VP purchasing/supply/CPO	4%	8%
Other	11%	NA
SOURCE: PURCHASING

Average salary of job title according to industry
(thousand $)

Industry	Buyer	Senior buyer	Purchasing agent	Purchasing manager	Asst. purchasing manager	Materials manager	Purch/matls director	VP purchasing
Communications equipment	38.1*	52.4*	45.2*	63.7	#	56.8*	98.6*	#
Computers & related eqpt.	#	63.5*	41.6*	79.5	#	69.0*	192.5*	219.0*
Equipment/machinery	40.2	54.1	51.9	66.0	#	66.0	128.8*	107.7*
Electronics	39.4	50.4*	52.3*	64.7	#	66.6*	94.3	151.0*
Energy/mining/utilities	46.7*	76.3*	60.8	73.1	#	101.8*	117.0*	#
Financial, services	#	#	40.5*	56.7*	#	#	97.3*	153.5*
Industrial controls/instruments	41.5*	58.1	47.2*	70.4	#	90.0*	#	118.5*
Miscellaneous mfg.	40.9	55.0	48.9	63.2	51.5*	70.0	89.6	131.0
Primary metals/metals fab.	45.6*	57.9	42.4	58.1	#	68.5*	83.6*	187.5*
Process industries	48.1	62.4	60.8	79.6	37.0*	68.9*	110.9	103.8*
Transportation/automotive	42.1	58.7	51.2*	75.4	49.7*	82.5	108.1	178.0*
Wholesale/service Ctrs	44.1*	54.4	39.8	66.4	#	63.6*	108.1*	145.0*
* = Fewer than 10 respondents. # = One or no respondents. SOURCE: PURCHASING

Salary vs. job title

Title	Average salary (thousand $) All	Average salary (thousand $) Men/Women	Highest salary (thousand $) Men/Women
Buyer	42.4	46.9/38.7	68.0/60.0
Senior buyer	57.4	58.8/54.7	111.0/90.0
Purchasing agent	50.0	53.0/43.8	106.0/82.0
Purchasing manager	67.9	72.3/58.1	170.0/175.0
Asst. purchasing mgr.	51.2	*54.2/*48.7	60.0/73.0
Materials manager	74.2	76.3/63.8	390.0/110.0
Purchasing/matls dir.	102.3	106.7/78.3	240.0/165.0
VP purchasing/supply/CPO	155.0	152.3/*170.7	279.0/590.0
Other	69.0	73.8/55.3	145.0/163.0
* = Fewer than 10 respondents SOURCE: PURCHASING

Average salary of job title according to commodity
(thousand $)

Commodity	Buyer	Senior buyer	Purchasing agent	Purchasing manager	Asst. purchasing manager	Materials manager	Purch/matls director	VP purchasing
Metals	39.6	56.5	46.7	61.1	60.0	67.8	94.7	112.9*
Chemicals	43.5	57.8	56.5	69.8	#	74.4	108.3	142.6*
Electronics	42.5	55.9	49.9	69.8	#	67.6	97.8	119.2*
Packaging	41.8	66.3	47.1	72.1	#	61.8*	105.9*	128.3*
Components	42.8	54.6	46.2	62.4	57.7*	73.9	99.8	172.8*
Machinery	49.2*	72.3	61.1	81.7	#	#	105.0*	304.7*
MRO	43.2	55.5	60.9	75.0	39.5*	85.0*	75.4*	89.0*
Office eqpt/supplies	39.7*	44.0*	39.2*	#	#	#	#	#
Transportation	49.5*	#	36.0*	#	#	96.5*	#	155.0*
IT	#	60.2*	53.5*	84.2*	#	#	122.0*	189.3*
Services	43.3*	68.7*	65.6*	83.2	#	183.3*	158.0*	#
Multiple	42.2*	56.0*	43.1	67.0	#	63.4*	104.8*	#
* = Fewer than 10 respondents. # = One or no respondents. SOURCE: PURCHASING

Purchasing's average salary: 1981 to 2003

1981	$29,000
1982	$30,700
1983	$31,600
1984	$32,800
1985	$33,600
1986	$35,700
1987	$38,300
1988	$39,900
1989	$40,700
1990	$41,600
1991	$43,100
1992	$45,000
1993	$46,100
1994	$47,500
1995	$49,700
1996	$50,500
1997	$52,200
1998	$54,700
1999	$57,600
2000	$61,300
2001	$64,000
2002	$64,300
2003	$67,300
SOURCE: PURCHASING

Cities with the highest average salaries

		Average salary
1	Chattanooga, Tenn.	$117,900
2	Lexington, Ky.	$117,400
3	Jacksonville, Fla.	$101,200
4	Pittsburgh, Pa.	$98,100
5	Atlanta, Ga.	$88,000
6	Raleigh, N.C.	$84,300
7	Santa Ana, Calif.	$84,000
8	San Diego, Calif.	$82,300
9	Harrisburg, Pa.	$81,900
10	Houston, Texas	$80,200
SOURCE: PURCHASING

Cities with the lowest average salaries

		Average salary
1	Mankato, Minn.	$35,700
2	Little Rock, Ark.	$43,200
3	Canton, Ohio	$45,400
4	Fort Worth, Texas	$47,700
5	San Antonio, Texas	$48,700
6	Indianapolis, Ind.	$50,200
7	Fort Wayne, Ind.	$51,200
8	Mansfield, Ohio	$51,400
9	Erie, Pa.	$52,000
10	Stockton, Calif.	$52,800
SOURCE: PURCHASING

Salary vs. experience

Experience	Average salary (thousand $) All	Average salary (thousand $) Men/Women	Highest salary (thousand $) Men/Women
3 or fewer years	54.6	61.5/44.8	160.0/130.0
4 to 6 years	53.6	57.6/46.5	160.0/140.0
7 to 10 years	60.4	67.9/49.4	273.0/130.0
11 to 15 years	70.7	75.0/62.0	250.0/590.0
More than 15 years	74.7	79.9/58.0	390.0/175.0
SOURCE: PURCHASING

Salary vs. organizational unit

Organizational Unit	Average salary (thousand $) All	Average salary (thousand $) Men/Women	Highest salary (thousand $) Men/Women
Corporate	72.2	78.4/57.5	390.0/590.0
Division	76.6	80.7/65.2	279.0/165.0
Plant	54.8	60.4/44.9	145.0/175.0
SOURCE: PURCHASING

Salary vs. certification

Certification	Average salary (thousand $) All	Average salary (thousand $) Men/Women	Highest salary (thousand $) Men/Women
CPM	80.0	83.5/69.4	279.0/590.0
Not certified/did not answer	63.2	69.8/50.1	390.0/165.0
CPIM	83.7	81.5/94.0	215.0/590.0
Not certified/did not answer	66.1	72.7/52.1	390.0/175.0
SOURCE: PURCHASING

Salary vs. company size (annual sales)

Annual sales	Average salary (thousand $) All	Average salary (thousand $) Men/Women	Highest salary (thousand $) Men/Women
$125 million or less	54.8	60.1/45.4	220.0/163.0
Less than $15 million	46.3	50.5/40.8	127.0/80.0
$15 to $50 million	54.1	58.6/46.1	145.0/83.0
$51 to $125 million	68.3	74.0/53.7	220.0/163.0
$126 to $500 million	73.5	79.2/59.6	230.0/140.0
More than $500 million	85.7	88.6/75.4	390.0/590.0
$501 million to $1.5 billion	79.6	84.5/59.7	250.0/130.0
$1.6 to $3 billion	87.0	89.1/75.2	215.0/125.0
More than $3 billion	88.8	90.9/82.6	390.0/590.0
SOURCE: PURCHASING

How Purchasing conducts its survey PURCHASING magazine's 2003 salary survey of purchasing professionals is based on questionnaires completed by 1,422 PURCHASING magazine readers. Responses were received from purchasing professionals representing a wide spectrum of buying responsibilities, industries and personal backgrounds. The sample includes a large enough number of respondents in many subgroups and categories to allow meaningful comparisons between different segments of the purchasing profession. The overall statistical reliability for a sample of this size, for dichotomous questions when the results are projected to the population from which the sample was selected, is plus or minus approximately 1.3%. Note should be taken that the reliability of survey findings diminishes with sample size. This is particularly important to keep in mind when examining some of the smaller "cells" of the tables included in this narrative summary. (Percentages and averages based on a small number of respondents are identified by the symbols * and # in this report when the actual number of respondents is not shown with the percent.) The survey was developed by the editors of PURCHASING magazine, but all responses were tabulated by an independent research firm not affiliated with Reed Business Information. Not all of the data collected is reported in this article. Complete results of the 2003 salary survey can be purchased for $500 in U.S. funds. Payment should be made to PURCHASING magazine, P.O. Box 497, New Town Branch, Newton, MA 02456. Telephone: (617) 630-3799. Credit cards are accepted. The report may also be ordered through www.purchasing.com. More purchasing pros receive a bonus Slightly more than half (51%) of all survey participants report they receive bonuses as part of their compensation. This is an increase since last year (48%). However, when compared to compensation fifteen years ago, bonuses are a significantly more popular form of pay. Bonus is an average 10% of base pay, consistent with results from last year. Compensation in the form of bonus payments is more frequently reported by senior purchasing executives than by those with less senior positions (e.g., VP, purchasing, 78% vs. buyer, 34%); it is also more prevalent in larger-sized companies (63% for companies with sales of more than $3 billion versus 29% of companies with sales less than $15 million). Financial goals and profitability are the leading factors affecting bonuses, as 88% of those who get a bonus cite them as a reason. A third of those who receive a bonus indicate that cost targets and savings reductions play a role; 22% mention department cost targets, while 20% say cost targets for purchased parts and 1% report cost savings or reductions in costs. Eleven percent say quality, either in supplier quality improvements or product quality and warranty claims. Cycle time improvements are rated by 8% as a factor in their bonus. Individual goals or projects/personal performance are mentioned by 8% as a basis of their bonus. Women more frequently cite this than men (13 to 7%). Other factors affecting bonus payments include such items as on-time delivery to customer, inventory reduction, turns, safety, environmental goals, production and discretionary and holiday bonuses. Those in the $100,000 Club, purchasing VPs and directors are more likely than their lower-paid counterparts to know what their bonuses are based on; they more readily check financial goals, cost targets and supplier quality improvements, as well as individual performance and goals. More than any other industry, bonuses in the computers and related equipment and energy/mining/utilities industries are rewarded for meeting company financial goals (95% and 94%, respectively). Professionals in the primary metals industry are least likely to see a bonus for meeting financial goals; only 77% do. Purchasing professionals in computers and related equipment and the process industries (35% and 33%, respectively) are more likely to be rewarded with bonuses for meeting department cost targets. Those in the primary metals and miscellaneous manufacturing industries are least likely to see such a financial incentive (13%, 15%). Purchasing professionals in the financial and service sector (36%), computers and related equipment (30%) and in the equipment and machinery industries (30%) attribute their bonuses to meeting cost targets for purchased parts. Individuals in miscellaneous manufacturing are least likely to see bonuses for achieving cost targets for purchased parts. Those in the financial and service industries (27%), transportation (16%) are most likely to mention supplier quality improvements. With respect to commodity purchasers and their bonuses, most predominantly, office equipment (67%), transportation (60%) and machinery buyers (38%) check off department cost targets as a factor. The number of transportation and office equipment buyers getting bonuses is very small (five or fewer) so the sample may not be truly indicative of these segments. Bonuses for supplier quality improvements are bigger factors among those buying transportation/freight (20%) and electronics (18%) than among those purchasing other commodities. Bonus vs. job title Title Receives bonus Bonus percent of base Buyer 34% 5.8% Senior buyer 42% 6.3% Purchasing agent 37% 6.4% Purchasing manager 57% 9.0% Asst. purchasing manager 36% 6.2% Materials manager 59% 11.5% Purchasing/materials director 74% 14.3% VP purchasing/supply/CPO 78% 24.5% Other 47% 9.4% SOURCE: PURCHASING Women's salaries move to close gap Nearly one-third (447) of the respondents to PURCHASING magazine's 2003 Salary Survey are women. This figure is slightly lower than the proportion of women included in last year's survey. The average annual compensation among female purchasing executives is $53,900. The average salary of women has increased $3,900 (8%) since the last annual survey. This year's results indicate a $19,500 gap between the average compensation earned by men ($73,400) and women. The survey results show that in percentage terms, women's average compensation outpaced men's (8% for women versus 3% for men) during the past year. The highest salary earned by a female respondent to this year's survey is $590,000. She is one of nineteen women who reported annual earnings of $100,000 or more to this year's salary survey. This executive is a sourcing superstar who oversees corporate purchasing for a large nonmanufacturing company. She is responsible for more than $500 million in annual purchasing, most importantly in capital goods. Historically, women in the purchasing profession have been younger and less experienced than men. As in previous years, women respondents have fewer supervisory responsibilities, are in charge of smaller dollar volumes, have less frequently been graduated from college, are younger than men, and do not as often hold as many senior level positions as men—all prerequisites for higher compensation. Even when these factors are taken into account and men and women with comparable experience and responsibilities are compared, the average compensation among women generally appears to be less than the average compensation among men in the purchasing profession. Salary vs. gender Average salary (thousand $) Men Average salary (thousand $) Women Title $73.4 $53.9 Buyer 46.9 38.7 Senior buyer 58.8 54.7 Purchasing agent 53.0 43.8 Purchasing manager 72.3 58.1 Asst. purchasing manager 54.2* 48.7* Materials manager 76.3 63.8 Purchasing/materials director 106.7 78.3 Vice president purchasing 152.3 170.7* * = Fewer than 10 respondents SOURCE: PURCHASING $100,000 Club One hundred eighty-three purchasing professionals report annual salaries of $100,000 or more in response to PURCHASING magazine's 2003 salary survey. The average salary of $100,000+ earners is $135,000, basically the same as the past two years ($135,900 and $136,300). The highest salary is $590,000; last year the highest salary was $340,000. Forty individuals, 2.8% of purchasing professionals, earned $150,000 or more, almost identical to last year (2.7%). Again the $200,000 Club was almost exclusively male —14 of the 15 executives function as either purchasing/materials directors or VPs of purchasing. But, for the first time in the history of the salary survey, a female executive reported the highest salary— $590,000. The average age of purchasing's top earners is 49 years, statistically higher than the less than $100,000 group. The youngest respondent to reach the $100,000 Club is 32 years old; the oldest is 73. The majority of highly compensated purchasing executives have senior job titles, including vice president of purchasing (16%) and purchasing director (38%). Twenty-three percent are purchasing managers and 10% are materials managers. Of those earning $150,000 or more, 52% are purchasing VPs and 35% are purchasing directors. Five of eight (63%) of the highest earners work for the largest companies (annual sales of more than $500 million). Three-billion-dollar-plus companies employ 31%; 22% work at $126 million to $500 million companies. Smaller firms employ 15%. One-fourth of this year's top earners hail from the Great Lakes region. The Southeast boasts 21% of the high earners and the West is home to 15%; 14% are from the Mid-Atlantic; 9% the Southwest and 8% each from New England and the Plains States. The typical top earner has been employed in purchasing for 19 years. Sixty-three percent of the $100,000+ earners work at the corporate headquarters of their organizations. Twenty-four percent work at the division level. Eleven percent are plant employees. Commodities with the largest concentration of $100,000+ earners include: components (17%), chemicals (16%), metals (14%), electronics (9%) and packaging (9%). The biggest industry sectors, miscellaneous manufacturing and process industries, produce the most top earners, (19% miscellaneous manufacturing, 21% process industries). The vast majority (93%) $100,000+ earners have been graduated from college. Forty-eight percent hold undergraduate degrees (business, 68%; technical, 17%; liberal arts, 14%; associate's degree, 1%) while 45% have graduate degrees (MBA, 80%; other graduate degree, 17% and dual graduate degrees, 4% ). Thirty-five percent of those earning more than $100,000 have CPM (Certified Purchasing Manager) certification, statistically significantly higher than the percentage with certification among those earning less than $100,000. Nine percent of top earners report being certified in production and inventory management ( CPIM ) by APICS . Most $100,000 Club members (86%) receive bonus payments as part of their annual compensation. The average bonus, of those who reported bonuses at this compensation level, is 19% of base salary. Ninety-two percent of the $150,000+ earners receive bonuses, with the average being 30% of base pay, 39% of base pay for those earning more than $200,000. As the total compensation rises, the percentage that is bonus increases. Club members are better able to articulate the basis for the bonus; although the relative order of factors among those earning more or less than $100K was the same, those higher up on the compensation scale had higher frequencies of each of the reasons for their bonus. Company financial goals are the leading basis for bonus, with 96% of top earners reporting so, followed by department cost targets (31%) and cost targets for purchased parts (29%). Forty-seven percent of the $100,000 club is offered stock options; this compares with a mere 11% of lower wage earners being given stock options in 2002. Forty-two percent of the $100,000 club members receive both bonuses and stock options; only 8% were offered neither. The average value of stock options among top executives dropped in the past year to $74,000; the median stayed the same at $20,000. This year's highest paid executive ($590,000) is a female who has been employed in purchasing for more than 10 years. Working in the nonmanufacturing sector, she is a purchasing VP at a company with sales over $2 billion. The second highest paid executive (the top-paid male) earned $390,000, $90,000 of it in bonus compensation; he is a 44-year old materials manager who has been working in purchasing nearly all of his adult life, overseeing 16 people and more than $500 million in purchasing. Nineteen women are included in this year's $100,000 Club. The group ranges in age from 32 to 59 years, and has an average 18 years of experience in purchasing. Although the sample size is too small to make a statistically significant comparison, they are on average younger (47 versus 50 years old) and have slightly less purchasing experience (18 versus 19 years) and supervisory responsibility (10 versus 12 subordinates) than their male counterparts. One hundred thousand dollars or more $100,000+ $150,000+ $200,000+ Total who earn 183 40 15 Men 161 36 14 Women 19 4 1 Average salary $135,500 $202,200 $265,400 Highest salary $590,000 $590,000 $590,000 Average age 49 51 51 Average years experience 19 21 21 Average number subordinates 11 23 39 Median number subordinates 6 11 16 Percent receiving bonus 86% 92% 93% Average bonus % (those receiving) 19% 30% 39% Percent receiving stock options 47% 55% 33% Average stock option value* $74,200 $158,300 $421,300 Median stock option value* $20,000 $40,000 $350,000 *Includes those whose stock options currently have no value; values are rounded to the nearest hundred dollars. SOURCE: PURCHASING One hundred thousand dollars or more (Distribution of purchasing professionals earning $100,000 or more according to commodity) Commodity $100,000+ $150,000+ $200,000+ Metals 14% 15% 7% Components 17% 20% 13% Chemicals 16% 12% 13% Electronics 9% 8% 7% MRO 7% — — Packaging 9% 12% 13% Machinery 7% 5% 13% Services 6% 8% 7% Office Equipment 1% — — Information Technology 5% 5% 7% Transportation/Freight 2% 2% — Multiple Commodities 4% 5% 13% SOURCE PURCHASING

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