Discover
the latest trends in pay practices, structures and diversity of leading
European companies.
In a year of relative quiet on the executive
compensation front, boards have ensured that their own fee increases also keep
a low profile so the interesting developments are more to be found in the
structures and compositions of boards and in the evolving roles of committees.
This review provides a detailed snapshot of the background, experiences and pay
of the individuals responsible for the governance of Europe’s companies.
highlights
from the report
change of
scope
We have seen a
clear change of scope around both risk and remuneration committees. The
prevalence of risk committees went from 12 per cent last year to 22 per cent
this year.
the scope
of remuneration committees is increasingly changing
The scope of
remuneration committees is increasingly changing as the committee work takes on
more and more aspects of managing executive human resources, including
succession and performance management. We now see about one third of
remuneration committees with a scope beyond simply the pay and rations of
executives.
the
composition of boards is changing
The proportion
of female directors increased across the sample from 21 per cent to 23 per cent
over the year and some 38 per cent of new director appointments were women. At the
same time the gender pay gap we have been reporting on in previous years fell
marginally from 10 per cent to 9 percent as more women have been brought onto
boards’ committees. The percentage of committees without women members fell
during the year from 43 per cent to 34 per cent for audit committees and from
48 per cent to 40 per cent for remuneration committees.
boards are
much more international
This year we saw
the average percentage of local directors drop from 66 per cent to 64 per cent
and the average percentage of directors with the majority of their career in
the country where the company is headquartered dropped from 62 per cent to 55
per cent.
multiple
board positions
This year we
also tested the hypothesis that European boards tend to be populated by the
same set of directors and found that this is not the case. Only 13 per cent of
directors sit on more than one large European corporate board.
board fees
are following executive pay with minimal movements
Only Norway and
Sweden saw a median increase for individuals who were board members in the
sample both last year and this year.
the market
median level of actual fees paid moved
Although the
median increase was zero, the market median level of actual fees paid to
non-executive chairs of boards moved to €265,000 (up from €249,000 last year)
and the median fee for other non-executive directors was €81,800 (a downward
movement from €86,000 last year).
pay
structures have also been changing but not in a uniform way
Some countries,
like Germany, continue to see a significant share of companies use variable
compensation, in sharp contrast to practices in countries like the UK. Fees
delivered in shares are popular in countries like Switzerland and Finland but
almost unheard of in other countries like Italy. And across the continent it is
still relatively rare to see requirements for non-executive directors to build
a significant shareholding in the company they oversee, but we are expecting
this to change.
contact
For further information and interview requests, please contact:
Carl Sjostrom,
Managing Director | Executive Reward Europe.
Email: Carl.Sjostrom@haygroup.com
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