Dot-com Firms Rediscover Traditional Pay Option: Cash

Online companies are becoming more like traditional brick-and-mortar firms in the way they compensate employees, now offering them more cash along with stock options, a survey released last month found.

The study by the consulting firm PricewaterhouseCoopers found that while Internet companies continue to offer stock-option packages to high-level employees, cash pay offers have risen.

The top three positions--chief executive, chief operating and chief financial officers--saw total cash compensation rise 13% from last year, said the survey, based on the responses of 123 Internet companies.

Among respondents, base salaries increased by 9%. However, cash bonuses showed the largest increase, rising by at least 28%, the survey said. “These results evidence a continuing maturation process by Internet companies that has them acting and feeling more like traditional brick-and-mortar firms,” said Edward Speidel, director of the survey.

In addition to boosting cash compensation, some companies also are changing the way they use options, granting them quarterly in some cases, instead of annually, so that employees face less risk.