insideKENT Magazine Issue 24 - March 2014 | Page 143
BUSINESS
The UK has the highest paid
CEOs in Europe
THE UK HAS THE HIGHEST PAID CEOs IN EUROPE, ACCORDING
TO A COMPREHENSIVE NEW STUDY RELEASED BY VLERICK
BUSINESS SCHOOL.
The study looked at the annual reports of
all listed companies in Belgium, France,
Germany, and The Netherlands – and those
of the FTSE 100 in the UK. Financial data
was analysed separately for two categories:
companies with total assets of between ¤1
and ¤5 billion and companies with total
assets of over ¤5 billion.
such as bonuses, stock options and shares
has dropped 35%, which may explain why
there was an 8% drop in the total CEO pay.
Nevertheless, there was a 2% increase in
incentives as a proportion of pay. In Belgium,
combined incentives account for 30% of a
CEO’s remuneration, whilst in Germany
these make up to nearly 60%.
The median total compensation of a UK
CEO of a company with total assets over
¤5 billion was found to be just over ¤4.7mil
(£3.87mil). The next best-paid CEOs were
found in Germany at ¤3.1mil (£2.5mil). In
contrast, the lowest CEO compensation
packages were found to be in Belgium at
¤1.98mil (£1.6mil) and France at ¤2.29mil
(£1.88mil).
Xavier Baeten, expert in reward
management and Professor at Vlerick
Business School says: "One positive aspect
revealed by our data is the way firms are
using KPIs (Key Performance Indicators);
more and more companies are moving
towards offering non-financial incentives to
motivate their CEOs. This means that
companies are looking at what motivates
people beyond financial incentives, which
may lead to better performance.
Furthermore, I believe CEOs have lost their
confidence in being rewarded in shares as
they are afraid the share price will drop.”
Virtually all the FTSE 100 companies (99%)
still use cash bonuses to reward their top
management but the value of these has
dropped 20% since 2010. In the UK, over
the same period, the value of all incentives
143