Corporate RE Execs: Paid More, Valued More

ATLANTA—Corporate real estate executive' average compensation is on the rise, and so is the percentage of CRE executives seeing increases. Those are among the key takeaways from the latest CoreNet Global survey of executives at large corporations globally, conducted by CoreNet and FPL Associates.

Eighty-nine percent of the respondents to this year's survey reported that their base salary increased from 2013 to 2014, and 86% projected further increases for 2015. As a basis of comparison, 76% of the executives polled in last year's survey reported that their base salary had increased from 2012 to '13, and 79% projected further increases for this year.

The average total annual compensation for a head of corporate real estate globally was $231,197 in '14, compared to $209,693 in '13, an increase of more than 10%. The year-over-year increase among all respondents to last year's survey averaged 6%.

“For several years now, we have been seeing compensation growing in our profession,” says Angela Cain, CEO of CoreNet Global. “We believe these increases are the direct result of corporate real estate professionals assuming more strategic roles and taking on more leadership positions within the corporation.”

Those leadership roles go beyond buying and leasing real estate, Tim Venable, CoreNet's head of research, told the Wall Street Journal last week. “Their increased compensation reflects their greater value,” he said. That's because, as Cain observes, “Effective management of corporate real estate now encompasses finance, technology, workplace and often the corporate brand itself.”

Underpinning the executives' increasing prominence is the increasing prominence of corporate real estate itself. In a CoreNet survey released this past October, nearly half of the finance executives polled said that a change in their company's operations—such as business growth or expansion—would increase their CRE expense over the next three years. The executives also noted that the corporate real estate function is a key strategic component that links human resources, globalism, technology and the workplace.

“In the past, real estate may have been treated almost as an afterthought in a company's business planning,” according to a report on results of last October's finance executive survey. “Today, it's likely that the CFOs who relegate real estate to the back office do so at their own peril.”

Reflecting this acknowledgement of corporate real estate's overall value, 52% of the respondents to the latest CoreNet Global Compensation Survey reported an increase in annual incentives/bonuses in '14 compared to '13, and an equal percentage projected an increase for this year, as well. The projected average increase in annual incentives is 14%.

Long-term incentive compensation also increased for many of the respondents. Fifty-seven percent reported increases in long term incentives in 2014 compared to 2013, while 41% predicted an increase in 2015 from 2014. Last year, the percentage reporting Y-O-Y increases in long term incentives was 34%.

CoreNet and FPL surveyed 229 respondents, who included executives in numerous positions in addition to head of corporate real estate, in the third quarter of '14. The questionnaire included a number of questions that have become standard to the CoreNet Global Compensation Survey, in order to make comparisons to prior years' studies and to identify trends.