By Jason Bramwell
For the first time in twenty-four years, the average annual total compensation for members of the Institute of Management Accountants (IMA) has topped $130,000, while average annual salaries for IMA members increased 3.3 percent, from $109,001 in 2011 to $112,625 in 2012, according to a new IMA report.
Professionals holding the Certified Management Accountant (CMA) credential continued to enjoy greater earning power. CMA holders reported an average salary of $115,290 in 2012 compared to $92,570 for those without certification, states the IMA 2012 Annual Salary Survey. The average total compensation – which includes base pay plus incentives, such as bonuses and profit sharing – was $139,578 for CMAs compared to $105,497 for non-CMAs or non-CPAs.
"I'm a believer that an extra certification gives you a bit of an edge and an extra differentiator, whether it's salary or opportunity or influence on the profession", IMA President and CEO Jeff Thomson, CMA, told AccountingWEB.
The report, published in the June 2013 issue of IMA's Strategic Finance magazine, cites professional certification, advanced degrees, and experience as the factors that drive salary increases. The findings suggest that the outlook is optimistic for accountants as recovery from the recession continues.
"It's great that we're in a profession that adds value and that tends to be resilient during tough economic times", Thomson said. "The overall outlook is optimistic, and we're very pleased with growth rates and trends that we see in opportunity and competence. We're also very excited by what I would call the certification premium – the salary premium for having certification. It's heartening and positive for us who believe in certification as a differentiator and as a competency builder."
While average total compensation for IMA members has increased steadily since the start of the recession in 2007, average salaries hit a roadblock in 2011, dropping slightly from $109,265 in 2010 to $109,001 in 2011 (see sidebar). It was the first time accounting salaries declined in the history of the IMA salary survey.
While he couldn't pinpoint the exact cause of the salary decline in 2011, Thomson said the debt crisis in Europe could have been a contributing factor.
"When a crisis hits the United States or Europe, it usually impacts the entire global economy. When times get tough and consumers are purchasing less, it means generally less income for companies, which means they have to retrench a bit and may not be able to offer salary increases and things of that sort", he added. "It was a relatively small pullback in 2011. I would loosely and not directly connect it to economic trends and downturns. But the global economy has become so interconnected and interdependent, and it's no longer that a regional crisis can occur without it impacting the global economy because trade and commerce has become so global."
Annual salaries for IMA members rebounded strongly in 2012, as evidenced by an increase of $3,624 over the 2011 annual salary – the largest year-over-year dollar and percentage increase in the report's history.
The average total compensation for IMA members increased from $129,591 in 2011 to $135,654 in 2012. Renewed consumer confidence and an increased dependence on organizations' finance teams are reasons for the increase, Thomson said.
"At the macro level, there's a higher level of consumer optimism, which means more spending, which means more profit for businesses, which means they can plow that profit into retained earnings and retained employees through salary increases, bonuses, and incentives", he stated. "At the micro level, finance and CFO teams are being asked not just to preserve and protect value, but to create new value. More CFOs are also helping to drive innovation. CFOs and accountants are sometimes viewed as the least creative and the least innovative people, but look how far we've come."
The Certification Advantage
The one set of data the IMA really hones in on is salaries for certified accountants versus noncertified accountants, Thomson said.
"We don't just look at CMAs, but CMAs and CPAs", he added. "The general theme once again for every year that we've been doing this survey is that not only is the level of salaries higher, but also, generally speaking, certification results in or is associated with higher relative pay."
The advantage of certification is evident at all stages of one's career, as certified professionals in all five of the survey's age categories reported higher earnings. The age categories include:
- Nineteen to twenty-nine
- Thirty to thirty-nine
- Forty to forty-nine
- Fifty to fifty-nine
- Sixty and over
"When you look at the younger nineteen to twenty-nine age-group, which we would call a little bit of student and a little bit of young professional, CMAs earn 37 percent more than noncertified young professionals", Thomson said. "If you look at average total compensation, the certification premium is even more pronounced. CMAs earn 44 percent more than non-CMAs in the nineteen to twenty-nine age-group. CMAs earn about 32 percent more than non-CMAs across all age-groups."
Thomson said the survey results show that spending the time, effort, and money on obtaining advanced degrees, experience, and certification pays off in the long run.
"I think that's good for society and good for those who believe that education can lead to great things", he concluded.
About the survey:
The data in the IMA 2012 Annual Salary Survey is divided into multiple sections, including management level, academic degrees earned, industry, and geography. Data was collected from a random sample of 5,117 IMA members in the United States in December 2012 and January 2013.