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1 Volume 75 ERI UPDATE Quarterly Notes For ERI Subscribers 2007 Subscriptions Professional Editions remain at $889 per licensed subscriber. Data and pricing for Consultant Editions reflect more complex use/applications including compliance, court, consulting and board level analyses. The combined Consultant Assessor Series package saves over $14,000 in individual purchases. Every Dataset has a Key Assessor Series differentiate by industry, and the US Government continues to confuse datasets and users. A one sentence MBA is: Business is the making/selling of a product/service at a profit. How? What? Why? Activity Code/NAICS esic/sec/sic NTEE NAICS (North American Industrial Classification System) reclassifies fast food retailers (what) into NAICS manufacturing categories (how). The nonprofit world uses NTEE, which focuses on purpose (why), few of which are profit focused. Certain sources (the US SEC, using an SIC) have their own codes. To combine and compare, ERI maintains a consensus esic, and as of, we are coding the IRS Masterfile s 3 million entities with our best esemantic match/ Xwalk (NTEE assignments are leased from the Urban Institute). Health Care Survey Assessor TM July contains Beta Test A with California hospitals shown below. For Assessor Series or Reference subscribers, the next year s renewal offer may accompany this ERI Update. To conserve postage and packaging, ERI sends out the following year s subscription renewal offer with the last two quarterly releases of each year s subscription Salary Increase Survey Subscribers are reporting recruiters aggressively telephoning skilled employees in the workplace in ways not seen for 30 years. ERI's Salary Increase Survey is free to any subscriber (with a License Code of any type). Access it from the top of ERI s Platform Library. Companies report planned salary and merit increases by job function, as well as industry and area; 1/1/07 examples: Executive 4.7 % MidMgmt 4.3 % Finance 4.2 % IT 4.0 % Supv 3.7 % Final New NAICS for 2007 There are 1179 U.S. industries in the new US NAICS which means there almost 3x as many industries as SOC "occupations" (O*NET's new name for job families). Litigation concerns are driving HR selection, pay, and advancement policies toward job families. Executive Compensation Assessor To assist privately held firms and subscribers, ERI has added tabs for Black- Scholes, Financial Comparables (found previously as the Valuation Assessor), and Peer Group Lists to the Executive Compensation Assessor & Survey for the editions. Labor Economics ERI is helping PAQ Services, with its million field SME job analyses (30 years), to transform itself into an occupational data/ web services firm. See the Loan/Earnings Verification Service modules for web applicant systems (page 4). Alternate Economic View For those who rely on US government indices - from John Kenneth Galbraith, who passed away April 29 at aged 97, the problem with economics is the willful denial of the presence of power and political interests. In memory, we combine ERI s espideri mining of job boards, decades of projecting salary/col structures, and parsing of job populations to create new mindful Indices th Avenue NE, Suite 100 Redmond, Washington USA tel fax info.eri@erieri.com

2 EXECUTIVE COMPENSATION The Largest Executive Pay Survey ERI s Executive Compensation Assessor & Survey software has collected all the data available from the SEC regarding proxy and 10-K reporting since For the past two years, we have also been collecting 8-K reports where privately held companies (involved in a merger or acquisition) have their management pay reported (a needle in a haystack). ERI s Nonprofit Survey Assessor (Professional Edition) and its Consultant Edition, Compensation Comparables Assessor & Tax-Exempt Survey have combined manual and OCR extractions from unique organizations in amounts never before seen. The total is over 200,000 unique organizations with over 1 million named executives. Others claim they are the largest executive compensation survey. Believe them if you wish. (And as of July, we have added a Business Services Contractor to report an additional 300,000 organizations.) 2006 ERI Executive Compensation Index Wall Street Journal/Career Journal Princeton, NJ and Redmond, WA (May 2006) - For the second reporting period of 2006, the May Total Cash Compensation Report for the 45 highest-paid executives was 41.3% higher than the 2005 levels. The May 2006 report shows while base pay decreased slightly, the average Total Cash Compensation per executive set a new high of $5,162,298. The previous second-period high of $3,683,131 Total Cash Compensation was set in 2001 prior to the effect of September 11 th. The Total Cash Compensation Index reflects data submitted from a randomly (among monthly reporting dates) selected group of 45 publicly traded companies among those reporting compensation to the Securities and Exchange Commission. The Total Cash Compensation Index reflects data submitted from a randomly (among monthly reporting dates) selected group of 45 publicly traded companies among the 6,500 that report compensation data to the SEC. This average comparables group is from the population of publicly traded corporations which in itself has been decreasing in size (after Sarbanes-Oxley). 2

3 NEW CONSULTANT SERIES EDITION APPLICATIONS Geographic Assessor - OFCCP The US DOL website asks: How will OFCCP decide which desk audit submissions to accept at face value and which to examine in depth in order to ensure that the proper race/gender/ethnicity information is included? The Internet Applicant rule emphasizes that OFCCP will compare the proportion of women and minorities in the contractor s Internet Applicant pool with labor force statistics... for a job posting. So how does one know what those statistics might be for the new rules that went into effect as of February 6, 2006? It may appear simple, but consider: o There is a new EE0-1 form/format for 1/1/2007 that differs from the 1990 old form, with data based on counties combinations as Census Sectors, now replacing counties. Job families also differ between 1990 and 2000 Census data. o o ERI shows both/all and a normalized trend to present month. The new Regs/rules call for examination of the specific job/ position and not the job families favored by online Internet testing/applications (legal, CPA, major consulting firms recommend use of as few as 5-7 job families ). ERI, working with PAQ Services and the edot Skills Project, has something unique to offer. We can estimate/parse job family populations into ~ 10,000 occupations ( occupations = jobs, not the occupational groups = job families ) found with the government s O*NET or the major occupational groups now recommended by consultants (to ensure generalized head counts). Use the Geographic Assessor Consultant Edition. If you are a larger organization with your own Internet Application systems, you might wish to consider PAQ s offering of this ERI data as a web service module where 1990, 2000, and projected data can be logged/stored with applicant records for that day when your organization might need to defend itself. Relocation Assessor - Plant Relocation ERI introduced its beta of this application with SalariesReview.com s Staffing Pattern & Salary Increase Estimate Report where you can model your own organization or any firm, among the 12 million in PAQ s Employer database where credit agency, government reports (Form 990s, 5500s, etc.) and leased sources provide SIC industry, geographic location, and size dimensions. For ERI, we combine this staffing profile with our 2007 Salary Planning Survey database (where increase values differ by job function, industry, and geographic location) to provide a model of competitive practices (that, on average, will be correct; but in the specific, incorrect). 3

4 ONLINE LABOR ECONOMIC DATA $9, $19, $29... edot + (now renamed the Occupational Assessor TM, Consultant Edition) is an $889 annual subscription that requires a signed License Rider. PAQ Services and ERI are not in the fee-for-service business of: consulting, litigation support, or expert witness testimony, etc., but we are now using the website to share labor economics data in a more economic manner. PAQ data and analyses are acclaimed as at the top of the list regarding their usability and practicality (DRI Report for Social Security). Because of recent settlements (Nov 2004) and (Oct 2005), private disability insurers find PAQ s edot Skills Project data a unique source. Used by professionals worldwide, PAQ s reliability and validity have 30+ years of court acceptance. (ERI has 17 years.) Now PAQ and ERI s labor data are more economically accessible. To provide the best datasets possible, PAQ and ERI have combined their resources to provide the most robust datasets. Subscribers are expected to be knowledgeable and to use this data as one of several sources. US FLSA Estimates Used by salary administrators, this estimate is the same as found on edot s Professional Edition (using new post 8/23/2004 rules). Earnings Estimates These reports (nonmanagement, for-profit & nonprofit executives) are from SalaryExpert and cite/report their sing source data. Staffing Patterns SalariesReview combines with edot to assess the likelihood of a particular firm having a job by industry, size and location. Job Availability Provides the same data as Tab 4 of edot+, and allows state, county, Census or miles radius searches (needed by disabled travelers). Potential Employers Provides the same data as Tab 5 of edot+ as well as a list of organizations that are likely to have a specific job. Archive Job Board Provides the same data as Tab 6 of edot+ and verifies any claim that specific job openings did or did not exist at a given time or place. 4

5 edot + - OCCUPATIONAL ASSESSOR & SURVEY A New Name for edot+ (Professional/Consultant Editions) edot FLSA Professional and edot+ DDP Consultant Edition are now the Occupational Assessor TM Editions (allowing PAQ to potentially license the edot Skills database to other vendors and applications). Eight screens define this unique new application. They are: Occupational History Tab 1 - Collects work history, allows for alteration of average SCO measures to better describe the present/past position(s) Personal RFCs Tab 2- Contrast the job(s) vs. an individual s RFCs Search Filters Tab 3 - Captures the natural filter between job demands and a claimant s personal capacities. One can also simplify by searching for: o specific DOT SCOs (64) o new edot measures (35) o codes, text, skills, etc. The outcome is a listing of Alternative Jobs (that exist in the US economy) for which a claimant s residual functional capacities (RFCs) might fit. Job Availability Tab 4 - (3 x = 10) estimates cited. Potential Employers Tab 5 - Firms estimated to have these jobs! Archive Job Board Tab 6 - Review any past month s postings SSA DI DDP Estimate Earnings Summary Tab 8 - Also new, but only a prediction. Tab 7 - New! The only import ever allowed from/with ERI Assessor Series values. *Requires a subscription to applicable products: -Salary -Executive -Nonprofit -Healthcare -Geographic Assessors. *SSA does not subscribe to edot; to our knowledge, SSA still uses the 1991 DOT. Why an SSA DI Estimate? LTD carriers agreed with NY AG Elliot Spitzer, the DOL, and 47 other states in November 2004 to honor the outcome of an SSA Disability Determination unless error could be shown ( must give significant weight to evidence of an award of Social Security disability benefits as supporting a finding of disability, unless the have compelling evidence that the decision of the Social Security Administration was (i) founded on an error of law or an abuse of discretion,* (ii)... ). edot+ predicts what the outcome of an SSA DI DDP might be; often a determination that will be made two to three years after an LTD carrier s determination. We ask, without attempting to estimate and/or record an assessment, how could one ever do other than to adopt an SSA DI (which is often closer to underemployment insurance... )? 5

6 NEW RESOURCE CONCEPTS AND COMMENTS ERI, SalariesReview, and DLC ERI s philosophy since 1987 is to post/place source data (field job analyses, salary/other surveys, noncopyrighted data) on our fileservers for free public review. We also make that data available on linking sites when requested. Examples: Free College-Level Textbook In 1999, the ERI Distance Learning Center purchased the rights to the Belcher, Atchison college text and have updated it over a 7-year period (with quant and software applications). Offered at no cost online, this text is often used in both technical & university level courses (as are ERI DLC s 52 free online one-hour courses). Web Services ERI is assisting PAQ in offering unique job specific verification modules for 10,000 occupations and 12 million employers where claims of income reasonableness are used in: 1) Internet applicant systems 2) nontraditional lending (see FedReg. Vol 70 # 249) 3) traditional lending 4) charity contractor status 5) charities themselves Subscribers are provided a small Internet module to include within their systems either operating from: 1) text submitted for employer s name and postal code, job title and claimed income or 2) with more sophisticated matching (esemantic) of the claimed employer and occupation s name. Charges are based on frequency of use; flags may be set at +1.0 and +2.0 standard deviations. Call PAQ at if you have an interest. Supporting College Instructors If you teach compensation, employee benefits or job analysis, we can assist with subscriptions, free online analyses scoring for students, access to one-hour online courses, and course materials. Computer labs (Cornell University ILR School has been using ERIPL for almost 20 years), career centers, VE related courses, all subscribe. Salary Increase & Staffing Estimates now combines PAQ s Potential Employers database of 12 million privately held, publicly traded (divisions/plants), and nonprofit organizations, overlaid with US government county and national job family data, parsed into PAQ edot specific occupations, and profiled with ERI s Assessor Series and Salary Increase Survey data to create a model of planned salary increases and staffing for any industry, location, and organization size. Comments Overheard ERI visited in person with thousands of HR professionals from March - June 2006 while exhibiting research products at our first-ever San Francisco Subscriber Conference, WorldatWork, SHRM, IARP, ASA, AICPA and other conventions. New thoughts that have caused us to pause, initiate research products, or share with others include: Executive pay is leading to a redefinition of taxable corporate profits (as the result of many of today s corporations, both for profit and nonprofit, apparently appearing to exist only, or mainly, for the well-being of their management teams). The hidden US Patronage System that affects both nonprofit pay and US SSA Disability; governors and legislators stockpiling offseason election staffs as state employee SSA DI Office personnel and/or charity contractors. Changing salary administration practices: Cost-of-living s siren song; for more: talk with ERI s Director, 1st Tuesday each month. $50,000/Year! - the average cost for each of the 21 million US citizens now on Social Security Disability Insurance and why America (and the UK) have lost the productivity of these working-age employees who will never, ever return to the workplace. Why compensation consultants may want to find a new profession (or rename their services) the new bottom of the pecking order (consulting subscribers report clients counsels sending standard letters requesting refund of fees post Grasso). How reporters are using PAQ s Potential Employers database to ascertain if US charities contractors are real; tracing contractors to known employers, their boards and officers, and relationships to US charity management/boards. Measuring stress in specific jobs: PAQ s unique view of the shattered American workplace based on the collection of 300,00 SSA 20 Mental RFC analyses (full rotation through the 33 x 3 measures , 1/3rd of which are cognitive). How charities/foundations with negative revenues/decreasing assets pay compensation; the unseen US House of Lords. Obscuring US economic reality with the use of multiple industry classifications, work described as job families rather than specific occupations, census sectors rather than counties, inflation excluding interest and energy costs... And there were more comments related to the hot labor market and the need for salary discipline than we ve heard in the last 30 years! 6

7 ERI PRODUCT ORDER SHEET ERI s ASSESSOR SERIES & Surveys software databases (single annual subscriptions, updated quarterly, most recent data) ERI s Platform Library ERIPL free Salary Assessor & Survey Professional Edition SA $ 889. $ Consultant Edition (with added executive/director titles, also UK/EU data) SA+ $ 2,389. Geographic Assessor & Pay Survey Professional Edition GA $ 889. $ Consultant Edition (with immigration/census/eeo-1 data, also UK/EU data) GA+ $ 2,389. Relocation Assessor & COL Survey Professional Edition RA $ 889. $ Consultant Edition (plus international locations and new labor cost model) RA+ $ 2,389. Executive Compensation Assessor & Survey Professional Edition XA $ 2,389. $ Consultant Edition (EU data in addition to US proxy/10-k, & valuation norms) XA+ $ 3,279. Nonprofit Salary Survey Assessor TM Professional Edition CA $ 489. $ Consultant Edition (with data/dots greater than +/- 1.0 standard deviations) HA+ see CAS below Health Care Survey Assessor TM Professional Edition HA $ 889. Consultant Edition (with added executive/director titles) HA+ $ 2,389. $ Occupational Assessor TM & Survey edot Professional Edition edot $ 489. Consultant Edition (new jobs, 35 new SCOs, & job availability statistics) edot+ $ 889. $ (License Rider required with edot+, Assessor Series subscriptions are separate, see DAS below) COMBINED SERIES software databases (single annual subscriptions, updated quarterly) Full Assessor Series FAS = SA, GA, RA, edot, CA $ 2,667. $ Professional Assessor Series PAS = FAS, XA, HA $ 4,306. $ Consultant Assessor Series CAS = PAS & SA+, GA+, RA+, CA+, HA+, XA+, RAS $ 5,668. $ Disability Assessor Series DAS = SA+, GA, CA, HA+, edot+ (plus License Rider) $ 6,556. $ Remuneration Assessor Series RAS= GAuk/eu, SAuk/eu, RAuk/eu & XAuk/eu 1,912. NETWORK SUBSCRIPTIONS A separate license is required for each individual user. Assessor Series Price $ X the # of users = $ OTHER RESEARCH PRODUCTS ERI s Second Annual Conference (April 22-24, 2007) $ 889. $ ERI s Geographic Reference Report 2006 (single hardcopy edition) GREF $ 489. $ ERI s Distance Learning Center (compensation courses for those new to compensation at free Salary Increase Planning Survey (online at $ with participation-- (free for participating Assessor Series subscribers via ERIPL Salary Increase Survey tab) Subtotal $ International orders: For CA and WA subscribers, add applicable sales tax: $ Foreign duties/taxes are a subscriber s responsibility Total $ Your Name: Title: Organization: Address: Tel: Fax: Credit Card Type: Credit Card #: Exp. Date: (Visa/American Express/Master Card) Purchase Order Number (or Credit Card Signature): th Avenue NE, Suite 100 Redmond, Washington USA tel fax info.eri@erieri.com US FEIN

8 (See: Install.txt) INSTALLATION GUIDELINES INSTALL/UPDATE ASSESSOR SERIES FROM CD-ROM ERI s quarterly dataset updates are provided via Internet download, memory key, or CD-ROM. All Assessor Series applications and their Demos can be accessed and/or installed from ERI s Platform Library CD-ROM. To install from CD-ROM: 1 Check the date printed on the front of the Platform Library CD-ROM to make sure that it is for the most recent quarter. 2 Place the CD-ROM in the drive and shut the drive door. 3 The CD-ROM should auto-run (may take up to 15 seconds). If after 15 seconds the CD-ROM does not auto-run, contact your organization s internal technical support department. Something may be wrong with your CD-ROM drive or device drivers. To manually run the CD-ROM: a) Click the Windows Start button. b) Select Run. c) Type d:\eri.exe. d) Click the OK button. 4 Once the CD-ROM runs you will see the Platform Library window, and you may be prompted to install or update: New subscribers may select Install from the Options for New Users dialog. If you are a returning subscriber with a prior quarterly update already installed, click Yes when prompted to update. You may also select any option from the To Install menu (at the top of the Platform Library window). If you are adding a new product to an existing subscription, click Ignore to input a new license code. CURRENT SUBSCRIBERS: AUTOMATIC UPDATES Each time one of ERI s Assessor Series software applications is run on a computer with an active Web connection, the application s automatic update program (XXXXXupdate.exe found in each installed program s directory) checks for new updates on the Internet. Users are prompted when new updates (quarterly updates as well as occasional mid-quarter updates) are available. This is the easiest option for subscribers the automatic update program does all the work of downloading, extracting and installing the latest files. CURRENT SUBSCRIBERS: MANUALLY UPDATE ERI S DATA FROM THE WEB Subscribers may also manually download and install the latest updates. 1. Go to and click Updates, then the download link for the appropriate Assessor Series software product. 2. Follow the instructions posted on the right side of the Updates Web page in your Internet browser. INSTALL/UPDATE FROM A MEMORY KEY (CAS SUBSCRIBERS) No installation required. ERI does all the work of installing your personal subscription to the Memory Key. Simply plug and play! GENERAL INSTALLATION INFORMATION ERI s software applications are designed to run on Windows NT, 2000, ME, and XP. Each quarter a CD-ROM is mailed to subscribers from which all software applications may be installed. Pre-installed memory keys are also available. In addition, all software applications may be downloaded and installed from the Internet. For more information on installation options, please select Help Topic Search from any of ERI s software applications and search for related topics using the keyword installation or visit ERI s Online Technical Support (from click Support, then click Free Online Technical Support). Better yet, sign up for an Assessor Series Conference Call Symposium (from click Support then select Free Conference Call Training). Call any weekday; we are staffed 24 hours/workday, From Europe, call OTHER RESOURCES/WEB SITES ERI s patented online surveys: PAQ s work analysis resources: ERI s UK/EU research site: SReview s international PRO+: and example linking sites: 8 ERI Economic Research Institute, Inc. US FEIN FEDLINK ER Duns Cage 0XP39 ERI continually endeavors to provide consistently excellent market-pricing information relating to compensation, cost-of-living, HR demographics and employee benefits. ERI DOES NOT PROVIDE CONSULTING, ACCOUNTING OR LEGAL ADVICE, AND ERI DOES NOT PROVIDE CONSULTING SERVICES OR ACCEPT FEES RELATING TO CONSULTING SERVICES, WHETHER OR NOT RELATED TO COMPENSATION OR EMPLOYEE BENEFITS ISSUES. Copyright 2006 ERI Economic Research Institute, Inc. Patent # 6,862,596, others pending. All rights reserved. Assessor Series and edot research products are registered trademarks of ERI in the United States and/or other countries. All other trademarks, trade names, or company names referenced herein are used for identification only and are the property of their respective organizations.