As a professional compensation geek, I live for the release of new data. The current year’s survey data is usually released in a two-week period from late July to early August, and as that period approaches every year, I become increasingly eager to see it. Part of that eagerness is about updating the database for the AirComp Calculator and the compensation studies I am retained to perform. I want to make sure my clients and customers have the latest data. But the scientific side of me is also eager to see if the trends I’ve been noticing throughout the year are manifested in the new data. Well, the 2023 data for both the NBAA and Gallagher Compensation Surveys are out and now that I’ve come up for air from the database-update process and have had a chance to examine the data, it’s time to report.
First, let me take this opportunity to deal with a misperception about the timeliness of survey data. A frequently heard complaint I’ve encountered goes something like this: “The damn survey data is like three months old by the time it even comes out! What’s up with that? What good is it?” In the case of the NBAA and Gallagher surveys, the data is typically current as of 1 March of the applicable year, collected in the period March to June of that year, analyzed in July and then released in the time period mentioned above. So, yes, the data is usually (at least) three months old by the time it’s published. This delay isn’t just about the need for time to both collect and analyze the data, there is federal law to be obeyed. Compensation surveys have to follow “Safe-Harbor” guidelines established by the U.S. Department of Justice and the Federal Trade Commission. One of these guidelines is that compensation data, even aggregate compensation data like that in these surveys, must be at least three months old when released. The rationale for the delay is to avoid real-time exchanges of compensation information that could lead to price fixing. The bottom line is that the delay between collection and release exists for a reason, not to annoy the users of the data. But this delay also necessitates aging the data into the present when it is used to support compensation decisions, a process that isn’t as straightforward as it might seem.
Now … onto the data itself. The good news for 2023 is that the dataset was quite robust. Much more so than it has been in previous years. In 2022, 382 organizations participated in the NBAA Compensation Survey with 3,092 incumbents (personnel in positions). In 2023, while the number of incumbents only increased by a few hundred (3,442 total), the number of organizations increased significantly to 455, an increase of nearly 20%. Having more organizations participate makes a huge difference in the dataset because additional organizations submit numbers that represent their unique compensation philosophies. The Gallagher Survey’s dataset expanded to an even greater degree, from 102 organizations with 5,367 incumbents in 2022 to 131organizations with 8,572 incumbents in 2023. If you’re doing a little math as you read this, you might be picking up on the fact while the NBAA and Gallagher Surveys both sample the same population, to a large degree, they attract different participants. In general, the NBAA Survey attracts smaller departments, with an average of 7.6 personnel per department in 2023. The Gallagher Survey attracts larger departments, with an average of 65.4 personnel per department this year. Together, the two surveys paint a comprehensive picture of the compensation environment in our industry.
Business aviation compensation across 14 positions rose an average of 6.5% from 2022 to 2023, up from 4.9% the previous year. But the statistics most people in our industry are curious about involve the change in pilot compensation, especially in light of all the anecdotal stories we’ve been hearing. From 2022 to 2023, pilot compensation across three positions, senior captain, captain, and first officer, grew an average of 11%. Senior captains increased 9.5%, captains increased 11%, and first officers increased 12%. According to the combined results of both surveys, the average pilot total cash compensation in all of business aviation is about $180,000, with senior captains making about $230,000, captains making about $190,000 and first officers making about $120,000. Keep in mind that this is across all companies, aircraft classes and types of operations.
In my last newsletter I addressed the compensation levels of pilots flying the newest, largest jets, like the Global 7500 and Gulfstream G600. It’s only fair that I close with some values there, especially since I mentioned that anecdotal stories about those pilots making $300,000 or more were becoming commonplace. Well, you must work with the data to get there, but the 50th percentile total cash compensation for a captain flying one of these premium jets rose to $265,000 in 2023, about $12,000 more than it was in 2022. But more interestingly, if you look at the 75th percentiletotal cash comp, that rose to $307,000 from $273,000 the previous year – an increase of over $34,000. The takeaway here is that those organizations that are targeting the 75th percentile with their compensation strategy are making serious increases to retain their personnel, while those targeting the midrange choose not to and risk losing personnel. It seems like these lower paying organizations might have gotten what they didn’t pay for. There is another statistic reported by one of the surveys. In the last year, nearly 50% of organizations experienced pilot turnover. The primary destinations for departing pilots were the commercial airlines or a job in another corporate flight department. This just proves what I’ve been harping on since I began doing this work years ago. If you want to keep your people, you need to pay them competitively, because if you don’t, someone else will.
