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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.
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.