There’s much debate at the moment about how much the nation’s top bosses ought to be paid. Those calling for executive remuneration to be cut back will be emboldened by claims today that Britain’s chief executives are the highest-paid in Europe.
A study of the continent’s largest firms (with a balance sheet of €10bn euros - £7.5bn - or more) found the average big cheese in Britain is paid a total of €5.65m each year, ahead of €4.27m in Germany, €3.15m in France, and €2.91m the Netherlands. What's more, five of the continent's 10 highest-paid chief execs work in the UK.
‘The UK has regained the top spot from Germany confirming the fact that the Anglo-Saxon corporate governance model, which is characterised by more dispersed share ownership, provides CEOs with more power in relation to the board, and leads to higher compensation levels,’ said Professor Xavier Baeten, one of the study’s authors.
The research by Vlerick Business School’s Executive Remuneration Centre also found that Britain’s bosses had a much higher proportion of their pay determined by performance. German bosses had the highest level of fixed salaries (€1.32m on average) and Britain’s CEOs were also beaten on that measure by chief execs in the Netherlands. That suggests that Britain’s bosses are at least expected to sing for their supper.
But the study also found that performance targets were very much skewed towards financial measures, with little concern for more qualitative factors. ‘Under half incentivise bosses using non-financial indicators such as how well they treat their employees, customer satisfaction, environmental performance and the like,’ Baeten added. ‘It seems to point to a pay culture that is still heavily weighted towards improving short-term performance, without much consideration for long term stability.’ The debate rumbles on.