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Executive pay slowdown across Europe

Staff writer ▼ | October 23, 2015
Towers Watson research shows that 64% of Europe’s leading CEOs received no salary increase this financial year1 up from 40% in 2014.
CEOs
Leaders and workers   Towers Watson research
The research entitled, CEO pay in the Eurotop 100, also reveals that these CEOs’ median actual bonus in the last financial year was 100% of base salary, a drop from the previous year of 115%.

In addition, the expected value of long-term incentive plans also dropped from 135% of base salary to 119% a decrease of 12% from the previous year.

As a result, according to the research, total pay for CEOs including salary, benefits, and all incentive plan pay-outs have remained constant during [2015] with a median total pay figure of €5.4 million.

Richard Belfield said: “In the past year we have seen remuneration committees increasingly making use of both short- and long-term design features to improve the alignment of executive compensation packages.

"The most noticeable change has been the introduction of more claw-back bonuses with many also lengthening the time executives must hold onto their shares. In addition short-term incentive plans now typically include not just profit or income metrics, but also a wider range of non-financial and individual measures.”

The research includes an update on regulatory and tax changes across Europe and indicates a certain convergence of policy around executive compensation.

Towers Watson reports that pay-caps, say-on-pay and greater remuneration disclosure have been introduced in a number of countries, which it suggests is leading to closer alignment between pay and company size by sector, rather than by country.


 

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