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