The average annual salary of respondents to PURCHASING Magazine's salary survey rose 4% to $70,100, a $2,800 increase over last year's average ($67,300). This year's median salary, $63,000, was $3,000 greater than last year's median ($60,000), a 5% increase.

Results of the 24th annual 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 $15,000 to $270,000; 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. Additional highlights of this year's report:

• The purchasing profession's average salary has increased 114% since PURCHASING began surveying its readers in 1981 and 48% over the past 10 years. The average salary reported in the 1994 salary survey was $47,500. The change in median salary over time was consistent with the change in average salary—50% over 10 years, 114% over 20 years.
• More than half of all survey participants (55%) receive bonuses as part of their annual compensation, higher than ever before. The average bonus among those who are compensated in this way is 10.1% of base pay.
• Senior executives—including purchasing vice presidents, purchasing and materials directors, materials managers, commodity managers, purchasing managers and assistant purchasing managers—are the most likely to receive bonuses. More than half of the respondents with 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 the bonuses received by less senior employees. The average percent bonus among purchasing and supply vice presidents or chief purchasing officers, for example, is 21% of base pay; the average bonus among buyers and senior buyers who receive bonuses is 6% to 6.5%. Consistent with seniority, bonuses are most common among purchasing executives with the greatest supervisory and dollar-volume responsibilities.

Twenty-one percent of respondents receive stock options—higher than in the four previous years that this question has been asked. The average value of these options is $79,200, even when you include the 26% of respondents who have stock options with no or negative worth. Stock options appear to be offered more among the younger population and least prevalent among the oldest purchasing professionals, but their value is still more related to factors other than age.

This year's analysis of salary, by job titles, indicates a range of $101,100 from the lowest position to the highest position. The average compensation for buyers is $44,100; the average for purchasing or supply VPs is $145,200. The highest compensation belonged to a VP in the transportation/automotive sector who earned $270,000. (A profile of the top earners is included in the $100,000 Club sidebar on page 34.)

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 occurs when an individual manages more than $25 million in annual purchasing volume. 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; and the proportion of employees with no oversight responsibility remained roughly the same as in last year's survey.

Based on this year's salary survey, the best-compensated purchasing executives, based on the commodity that they manage, are those who manage transportation and freight ($88,900) costs, services ($85,300) and information technology ($81,400).

The industries which have the highest average purchasing salaries are: communications equipment ($85,800), computers and related equipment ($84,500), process industries ($76,700), financial and services ($75,200) and energy/mining/utilities ($74,700).

As the survey has indicated 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 45.6 years; the average salary among respondents 41 to 50 years old is $72,300.

Also consistent with previous salary survey results, longevity bolsters average compensation in the purchasing profession. Average purchasing salaries increase 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-one percent of 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 6% among college graduates to $76,600 from $72,200, but among noncollege graduates, it dropped $100 to $52,700.

The proportion of this year's survey participants who are Certified Purchasing Managers (CPM), increased to 26%. As noted 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 $80,800; the average for those without certification is $66,300. Certified purchasing managers, on average, have four years more experience than those who are not certified.

The American Production and Inventory Control Society (APICS) granted CPIM certification— certification in production and inventory management—to 6% of the purchasing professionals responding to this year's salary survey. The greatest incidence of CPIM is among materials managers; 12% of materials managers hold this certification. The average salary of CPIM -certified materials managers is $81,800, for noncertified materials managers, it is $75,600.

Average purchasing salaries increase in step with company size. The threshold for average and above compensation is $126 million to $250 million in annual sales: Purchasing professionals employed by companies having more than $125 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 $37,200 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 percentage of women are employed at smaller firms than men (53% women vs. 41% men); 40% of men are employed at firms with more than $500 million in annual sales, whereas 32% of women work in companies of that size.

When pay is examined according to organizational unit, the average salary for purchasing professionals working at the divisional level is about even with those at the corporate level. The average salary for purchasing executives working at their company's divisional offices is $75,100, whereas the average pay for purchasing professionals assigned to corporate headquarters is $75,000. A higher percentage of those working at the corporate level are working for 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 the lowest average salary of the three organizational assignments ($57,600).

The Western states lead the continental U.S. for average compensation ($73,700), followed by the Southeast ($73,500) and Southwest ($72,900). Lowest average salaries are in the Plains ($64,300). However, the range of average pay varies by less than $10,000 between regions. Purchasing professionals in the Southeast and West (the two best-paid regions) have witnessed double-digit growth in average salaries the past two years (18% and 16%, respectively).

Men continue to report higher average salaries than women ($77,000 versus $57,400). However, this year, compensation rose 6% for women vs. 5% for men.