November: Sales and Marketing Executives

December: Laboratory & Technical

Managers at lube manufacturing plants and distribution facilities are responsible for overseeing a complex operation day in and day out. Products need to be blended, packaged, stored, transferred and delivered to customers in a timely manner under their supervision. Ensuring worker safety is paramount, in addition to staying on budget.

For all they do, plant managers are compensated handsomely, gauging from the 75 respondents who provided anonymous insight to LubesnGreases by participating in the 2018 Lubricants Industry Salary Survey. On average, they earn $141,300 in a year, with median compensation reaching $120,000-meaning that half earn more than that amount, while half earn less.

This years cohort includes 42 plant managers at lubricant manufacturers, who reported average earnings of $161,600 and a median salary of $150,000. On the other hand, 33 respondents work at lube distributors and earn a mean salary of $115,400 and median annual compensation of $100,000. Thats a difference of $46,200 in average salary and of $50,000 in median income from what their manufacturing counterparts make.

It should be noted that direct comparisons cant be drawn from the results of this years survey and the data collected in 2016. The pool of respondents changed, and higher or lower salaries do not necessarily mean that wages have gone up or down in two years.

However, its worth highlighting that plant managers at lube manufacturing facilities make on average close to $28,000 more in 2018 than what respondents reported in 2016, while those who work for lube distributors saw a modest gain of about $2,500 compared to two years ago.

Staffing Up

With new plants come new openings for plant managers. Earlier this year, Omaha, Nebraska-based Warren Distribution fired up a new blending facility in Houston with capacity of 68,000 metric tons per year of lubricants. To fill its fresh plant manager position, the distributor and blender promoted someone from within its distribution operation, said Donna Weeda, chief operating oficer.

Our strategy is to try and promote from within first and then look externally. There are cases where we may be looking for a skillset that we need to go external, but we also have cases where we did some stretch and moved an internal person into a role that was not a perfect fit and put a training program together for them, Weeda told LubesnGreases.

Promoting from within seems to be a common practice in the lubricant industry. Tom Schroeder, president of grease producer Axel Americas-a subsidiary of Nol, Sweden-headquartered Axel Christiernsson-said they usually also try to tap a seasoned Axel worker to take an open plant manager role.

He clarified, however, that this strategy is not always viable, especially for its grease plant in Rosedale, Mississippi. Its just much more of a rural area, and they dont have as big of a labor pool to draw from, he told LubesnGreases.

Schroeder added that the main thing Axel looks for in a candidate is work experience, with education also being considered depending on the location. Especially in Mississippi, we may not be able to get someone who comes with [lubricant] industry experience, but maybe they have a lot of operations experience.

When looking to hire externally, both Schroeder and Weeda said that their companies make use of different resources, including recruiters, posting job openings online and contacting people from their employees networks. In addition, Weeda said that Warren Distribution attends job fairs and shares job opportunities on social media.

Snapshot of a Manager

Similar to 2016 respondents, plant managers are, on average, close to 52 years old and have between 22 and 23 years of experience in the industry, but this years cohort surpasses the 2016 pool in years with their current employer (15 versus 14) and years spent in their current role (10 versus 8). 2018 respondents have probably seen salary increases corresponding to those additional years.

Surprisingly, but consistent with the 2016 trend, longevity does not translate directly to a higher salary. Managers who have spent less than five years in their position earn an average compensation of $148,800 and a median of $150,000. Those who have been managing a plant or distribution center for more than five years on average earn $138,700 and have median compensation of $105,500.

On average, plant managers supervise 35 employees. Those at manufacturing plants oversee 45 workers compared to 22 for those at distributors. The more, the greater the number of people being supervised, the greater the pay. At lube manufacturers, plant managers who supervise five or fewer employees have a mean salary of about $180,900. That number dips to $124,900 when supervision expands to six to 12 employees, but climbs right back up to $165,800 when it surpasses 12 employees. Lube distribution managers, on the other hand, have their income rise steadily the more people they supervise. They earned an average of $93,900, $108,200 and $142,000, respectively, for overseeing staffs of up to five, between six and 12, and 13 or more.

Big Companies, Bigger Paychecks

For some plant managers, the size of the company can determine whether a paycheck is heftier. Four of the respondents in this years survey said they make an average of $112,600 per year at companies with 10 or fewer employees, with a median wage of $88,000.

But the numbers climb for 48 percent of plant managers who work at companies with 11 to 200 employees, where salaries range between $104,000 and $129,500 on average with a median of $100,000 to $123,500.

The remaining 47 percent of respondents work at some of the larger lube manufacturing and distribution companies-those that employ more than 200 people. Those managers are bringing in between $152,800 and $191,000 on average and have median earnings of $127,500 to $185,000.

Plant managers at lube manufacturing companies see the rewards skew higher than for their counterparts at distributors. For companies with 11 to 200 employees, the average annual salary for a plant manager is between $117,200 to $147,500, while at the largest lube manufacturers, pay goes from $183,000 to $199,000 on average. By comparison, managers earn between $89,100 and $120,500 at lube distributors with 11 to 200 employees, and between $129,300 and $148,300 at those with 201 to more than 500 employees.

Where the Rewards Are

Most of the respondents in this years survey-39 out of 75-work in the manufacturing and distribution powerhouse that is the Central U.S. On average, plant managers can expect compensation of $124,300 in the Northcentral region and $164,500 in the Southcentral, and median earnings of $100,000 to $150,000, respectively.

The average paycheck for supervising a lube manufacturing facility is handsomely high; a manager in these plants can make $139,700 in Northcentral states and close to $193,000 per year in Southcentral, with medians of $120,000 and $176,800. While the numbers are a bit lower at lube distributors, they still bring home about $103,000 each year in this region, with a median of $89,000 in Northcentral and $99,000 in Southcentral.

The Eastern U.S. is the second most-represented area in the 2018 survey, with 27 respondents. Plant managers who work along the east coast can expect an average compensation of $141,600 in the Northeast and $150,000 in the Southeast, with medians of $120,000 and $152,000, respectively. Lube plant managers in these regions pull in an average of $148,400 and $133,500 per year, and while a manager at a lube distributor in the Northeast can expect around $80,000, a manager in the Southeast brings in a mean salary of $161,600 a year.

A Little Something Extra?

A hearty paycheck can keep plant managers happy, but companies that offer a bit more than the average can keep both motivation and lubricants flowing day after day.

Many in this years cohort received a raise in the past year-60 percent overall, with 71 percent of lube manufacturing plant managers and nearly 46 percent of lube distributors saying they saw a bump in their salaries. Seventy-five percent of managers expect to receive a bonus; as with salaries, the number reaches higher for those at manufacturers (nearly 79 percent) compared to distributors (70 percent).

Other forms of compensation vary between manufacturers and distributors. Three in ten managers at a lube manufacturing company expect to receive stock from their company compared to 6 percent of those at distributors, while 29 percent and 27 percent, respectively, expect some form of profit sharing. About 6 percent of managers at distribution facilities expect a commission based on sales of products, an option that is not expected for lube manufacturing companies.

Firm Footing

Financial stability is on everyones minds, but lube plant managers dont seem worried. When asked to rate their confidence in their level of job security on a one-to-five scale (with one the least secure and five the most), this years respondents consistently gave a solid 4.1 rating.

Whats not to like? In addition to high wages, companies like Axel Americas and Warren Distribution offer competitive benefits on health insurance, sick and vacation leave, disability compensation and 401(k) retirement plans. In Warren Distributions case, the company provides education reimbursement for employees pursuing higher degrees, as well as an apprenticeship program for workers.

For Warren Distribution, the most important characteristic of a plant manager is the ability to fit into the company culture. They do not always have to have all of technical skills, but they need to show emotional intelligence, and be able to work with people with diverse personalities, Weeda noted.

METHODOLOGY

With guidance from experienced specialists in both surveying and personnel issues, LubesnGreases designed a salary questionnaire for key job functions at U.S. lubricant suppliers. The main objective was to investigate compensation for three professional career paths (manufacturing/production; sales and marketing; and laboratory/technical). A second objective was to determine whether companies which manufacture lubes offer higher or lower salaries than those which distribute lubes only. A third objective was to track salary trends over time.

On July 16, 2018, questionnaires were emailed to 1,597 professionals drawn from the LubesnGreases and STLE databases, in the job categories under study; a reminder email was sent in each of the following three weeks. A total of 362 usable surveys were returned, for a 23 percent response rate. Participants responded directly to Charles R. Mann Associates Inc. of Washington, D.C., an independent statistical survey firm, which compiled the results in late August. No one at LNG Publishing or LubesnGreases magazine saw any individual data or any of the returned forms.

The respondents to the 2018 survey included 75 plant managers; 223 individuals in sales and/or marketing; and 64 in laboratory/R&D/
technical management.

A Peek at the Bosss Paycheck

While conducting our biannual Lubricants Industry Salary Survey, LubesnGreases wondered how pay for lube managers compares to those in the top echelons of the executive suite. Many publicly held companies publish the compensation for chief executive officers and other named executives in their annual proxy statements and financial reports. But this year, the federal Securities and Exchange Commission additionally began requiring them to disclose the pay ratio of their CEOs versus that of a median employee. This change, which was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, took effect for fiscal years beginning on or after Jan. 1, 2017.

Privately held lube companies are exempt from any need to report CEO pay, of course, and many large oil and chemical companies keep their lube chiefs compensation private by burying their lube operations deep within another business segment.

Still, there are a handful of exchange-traded companies operating almost entirely in the field of finished lubricants, including Quaker Chemical, Valvoline and WD-40. Others, including Calumet Specialty Products Partners, Clean Harbors, HollyFrontier, Milacron Holdings and more, lean heavily on lubricants to plump up their bottom line. And several leading multinationals-BP, ExxonMobil, Royal Dutch Shell-sit on sizable lubricant assets. Of course, the CEO of an integrated oil major has to steer a more complex enterprise than a pure-lubes company, but a look at these majors annual reports shows that they consider lubricants as critical to their financial success.

A few notes on the table at right: The 2018 Lubricants Industry Salary Survey focuses on lubricant company managers in the U.S. For comparison purposes, weve included a few major multinationals. WD-40 and Valvoline did not publish CEO pay ratios yet because their fiscal years began respectively on Sept. 1 and Oct. 1, 2016, prior to the SECs Jan. 1, 2017, starting date for disclosure. Shell did not disclose its CEOs pay ratio for 2017, citing the difficulty of determining its median employees pay, but said it expects to comply in 2019. -Lisa Tocci