The median actual total direct compensation received by CEOs across the Eurotop 100 has remained stable this year at €5.4 million, research by Towers Watson finds. Considerable variation exists between countries, with CEOs in Spain, Switzerland and the UK the best paid. In terms of sector, oil & gas and health care CEOs take home the most in pay.
Towers Watson, in a report titled ‘CEO pay in the Eurotop 100’, explores the differences and similarities in CEO pay across Europe. For its findings the firm analysed 96 companies within the Eurotop 100* that had their remuneration report published as of July this year.
Base pay, according to the report’s findings, has remained stable relative to last year, increasing 6% from €1,277 million to €1,350 million. Median bonus levels on the other hand dropped slightly from 115% of base pay last year to 100% this year. The difference between the highest percentile and lowest percentile in terms of actual bonus is relatively large at 104%. The median actual total direct compensation (TDC) collected by the CEOs stands at €5.4 million, with no change from the year previous.
Compensation packages are often fairly complex constructions, and vary considerably across Europe. Germany has a relatively low base salary, yet pays a considerable amount of total pay (47% in 2014) as bonus. Long-term incentives (LTI) make up around a quarter of the total German pay. The UK, by contrast, has low base salary, relatively low actual bonus at 25%, while the LTI make up 50%. The Nordics have by far the highest relative base pay at 64% of total pay in 2014, LTI only accounted for 13%.
Although TDC across Europe has remains stable, the data shows that there are considerable differences between pay levels in different countries. Spain for instance has seen the median actual TDC increase in this year’s analysis at just under €7.2 million, followed by Switzerland at €7 million. The UK too has comparably high CEO TDC at €6.5 million. On the lower end of the spectrum are the Nordics, where pay hovers around €2.3 million, followed by Italy that has seen pay in the Eurotop 100 drop from near five million to around €2.6 million. Top French CEOs take home €3.2 million.
Besides varying across regions, sectors have considerable differences in TDC too. Oil & gas CEOs come out on top for this years’ analysis at €9.2 million, followed by health care at almost €7.8 million. The banking sector has seen the biggest drop since last year, from €5.2 million to €3.5 million.
* The FTSE Eurotop 100 Index represents the performance of the 100 most highly capitalised blue chip companies in Europe.