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The global average cash compensation of a top executive in a corporation with more than 100,000 employees is EUR 1.35 million gross per year. Executive compensation is almost equally divided between a salary of EUR 660,000 and bonuses EUR 690,000. Basic salary increased by +5.5% compared to the previous year, total cash compensation including the bonus increased by +3.4%.
These are the key findings of a global survey conducted by the executive search firm Pedersen & Partners among 1,700 executives in 330 companies in 17 countries.
The top executives of this survey are CEOs and Board Members of international corporations with 129,000 employees, a turnover of EUR 40 billion, and profits of EUR 3.9 billion on average. These corporations constitute the global elite of large enterprises. Business results in many of these companies were successful in the last year. They increased their turnover and profits each by +6% on average and created more than 1.5 million new jobs in the last 12 months, increasing their number of employees by +3.5% on average.
Conrad Pramboeck, Head of Compensation Consulting at Pedersen & Partners and project manager of the survey, said: “Size of responsibility is the key driver for the remuneration of executives. Executive compensation in the top 100-enterprises in Europe and the United States is on average seven times higher than the salary of general managers in small and medium-sized enterprises and 40 times higher than the average salary of a white collar employee.”
Total cash compensation for top executives in large corporations is very similar in most Western countries. Their remuneration including the short term bonus is usually between EUR 1.3 million and EUR 1.4 million gross per year. In addition to their cash compensation, US-American top executives were granted long term incentives, mostly stock options, valued at EUR 393,100 on average. European top managers only received stock options worth EUR 76,500 on average.
Since executive compensation is closely linked to the size of the company, Pedersen & Partners’ survey also compared the salaries of top executives in large companies of the same size – 20,000 to 50,000 employees – in various regions of the world.
On a global level, executive compensation is on average still highest in the United States and Western Europe. Pramboeck added: “Top earners in large enterprises in emerging markets, like China, India, or South Africa receive compensation on the level of Western countries. However, executive compensation is on average still below the remuneration of their counterparts in Western Europe and the United States.”
Top executive compensation is currently increasing by +4% or +5% on average in Western countries and between +7% and +10% on average in emerging markets.
Conrad Pramboeck explained: “International comparisons of executive compensation must always be regarded with a certain amount of caution. China, for example, is a huge country with a great variety of compensation levels. Salaries in Shanghai, Hong Kong, or Guangzhou have reached similar levels to Western Europe while many other regions have substantially lower compensation levels.”