The “2004 Risk Management Compensation Survey” revealed an average salary of $162,352 among the 1,609 risk managers queried. That represents a raise of 5.4 percent from 2003's average of $154,100, and 26 percent from the $128,626 posted in 2000.

The survey was conducted by Logic Associates Inc., the risk management field's leading recruitment service, and was co-sponsored by National Underwriter. For the third straight year, Logic's report is based on a survey of NU's risk manager subscribers.

Once again, the survey found that bigger is better if you are a risk manager, as those working at the largest companies were clearly the best paid–getting higher salary and bonus payments than the overall average and much more lucrative deals than their peers at smaller firms.

Indeed, those at companies with over $15 billion in sales volume posted an average salary of $265,835–nearly triple the average salary of $93,010 for firms with $200 million or less in sales.

Top-level risk managers also received the highest average raise last year, at 7 percent, and enjoyed the profession's most dramatic salary growth since 2000–with their pay rising by nearly one-third over the course of this decade.

Those at the next biggest company-size level–between $7 billion and $15 billion in sales–posted 5.6 percent salary growth to an average of $226,123.

While this is nearly 18 percent less than the top company-size category, it is about 21 percent higher than those at the next level down–firms with between $4 billion and $7 billion in sales. In that category, the average salary was $187,124–5.0 percent higher than the year before. (See accompanying table for more details.)

Bonuses were also on the rise, with the survey's average up 8 percent in 2004 to $16,213. Bonuses are playing an increasingly bigger part in overall compensation as this decade progresses, with the average bonus up 40 percent since 2000.

The biggest growth on a percentage basis last year came for those at firms with between $201 million and $500 million in sales–with bonuses up 28 percent to $5,541. Risk managers in firms this size have seen their average bonus soar 54 percent since 2000.

Those working for companies with between $4 billion and $7 billion in sales posted the second-best growth rate–with the average bonus rising 12.5 percent to $22,321.

Those at the biggest firms (over $15 billion in sales) earned a bonus of $37,070 on average, up a little less than the profession's overall growth rate at 7.4 percent.

However, while national averages provide useful benchmarks, the survey is also sliced and diced by state and industry to give risk managers the clearest picture of where they stand in relation to their true peers, according to Bill Perry, president of Logic Associates, the veteran risk management placement expert headquartered in New York.

For example, while the average salary nationally for those at firms with over $15 billion in sales was $265,835, at communications companies that size the average salary for the risk manager was $301,215, and in the hotel industry it was $245,754.

Similar distinctions are found geographically, the survey found. In New York, the average salary for the largest-size company category was $285,038, while in Florida it was $232,877.

One major compensation incentive that is rising from the dead is the offer of stock options. Nearly all of the risk managers at firms in the top-two size categories receive such perks. Indeed, only at the two smallest company-size categories is the percentage of those receiving options below two-thirds.

“With the economy and the stock market doing better, stock options have re-emerged as a significant compensation factor,” noted Mr. Perry. “There was a period of time when people did not care about stock options, since the declining stock market threatened to make them worthless, but that's all changed now.”

Mr. Perry added that “giving risk managers stock options is a tangible way for firms to reward them for their contribution to the bottom line.”

“It's only fair for risk managers to share in the growth of their company's value since they play an increasingly important role in preventing major losses from ruining the firm's balance sheet, which ultimately could alarm analysts, scare off investors and drive down the stock price,” he added. “A proactive risk manager can make a huge difference in making sure no unforeseen circumstances undermine a company's quarterly reports.”

The economic recovery has also reignited the job market for risk managers, according to Mr. Perry. Last year at this time, he reported that while the highest-quality candidates usually had opportunities to move to better positions, good jobs were not easy to find for everyone looking for a change. This year, however, “we have been very, very busy. In fact, although last year started out slowly, it turned out to be a very good year in terms of placement activity.”

In 2005, he noted, “we're starting out like a house on fire. With the economy improving, there's money out there again. There's also a little more freedom to do a deal today. Quoting Donald Trump, 'the art of the deal' is alive and well in risk manager placement. Companies don't seem to be nickel-and-diming in their recruitment efforts. They're willing to do whatever it takes to close a deal and land the right candidate.”

That doesn't mean risk managers are changing jobs fast and furiously, however, he noted. “It's a process that could take several months to complete,” he said, citing one case in which negotiations went back and forth for nearly 10 months before a deal was concluded.

However, even with that particular lengthy negotiation, “there was a constant dialogue. It wasn't one of those things where you don't hear from the company for three months, or they hire somebody else who doesn't work out and then they get back to you. The deal progressed little by little each month, including interviews with different officials at the company, until both sides were comfortable enough to close the deal and make the move.”

Mr. Perry reported “more of an upbeat attitude with the recruitment process these days. There's more enthusiasm in the hunt on both sides–among those risk managers looking for better opportunities, and among those firms looking to upgrade their personnel to get someone more state of the art, with better qualifications for what it takes to succeed in risk management today.”

Adding to the energy in the job market is the fact that a growing number of companies are taking on full-time risk managers for the first time, according to Mr. Perry. At such firms, the treasurer or CFO might have handled insurance and risk management on a part-time basis, depending on their broker to take care of most of the details.

“But thanks to Eliot Spitzer, who wants to count on their broker?” said Mr. Perry, referring to continuing probes of alleged market manipulation.

Indeed, the fallout from the Spitzer probe presents tremendous opportunities for risk managers–if they are up to the challenge, according to Mr. Perry. “From some firms, I hear, 'Don't get me somebody who is cozy with the brokers,” he noted. “They want a risk manager who is going to actively manage their brokers, not someone who is just going along for the ride. They don't want the broker managing the relationship.”

In fact, he added, “if a risk manager is really good, he makes the broker work, keeps challenging the broker to do more and to do better, and he demands accountability. He is always on top of them.”