A report on the salaries of CEOs across Europe has found that Switzerland once again tops the table, ahead of Great Britain and Germany. The report also discovers that salaries have risen over the past year.
CHF8.7 million ($9.05 million): this was the median compensation of bosses of top companies in Switzerland in 2017, according to this year’s Eurotop 100 report, released on Thursday by consultancy group Willis Towers Watsonexternal link.
Like last year, this puts Switzerland firmly at the head of the European rankings for CEO pay, ahead of Great Britain (a median of CHF7.21 million) and Germany (CHF7.18 million).
Sevrin Schwan, CEO of Swiss pharmaceutical group Roche, led the individual race, taking home CHF14.57 million. He was followed by Carlos Brito, head of brewing group AB Inbev (CHF14.49 million) and Sergio Ermotti of UBS bank (CHF14.16 million).
Notable is that among the 100 largest European companies, Swiss CEOs receive the lowest proportion of their compensation in the form of fixed salaries, at 25%, the report writes.
Rather, “high variable components [such as bonuses] give them a greater opportunity to earn a top salary,” wrote Olaf Lang, managing director of Willis Towers Watson.
Cultures of pay incentives differ across Europe, the report goes on: in Scandinavia, it writes, considerably more emphasis is placed on fixed compensation (see table below).
Slimming the fat cats
Overall, the total direct compensation of the Swiss companies surveyed in the report was almost unchanged from last year, at +0.1%. The European median rose by about 5%.
In March 2013, Swiss voters backed an initiative to curb the high salaries of what they considered “fat cat” executives. However, later that year they rejected the idea of limiting executive pay to 12 times that of their company’s lowest wage.
So although shareholders of listed firms now have binding votes on remuneration packages, and various types of bonuses such as “golden parachute” severance agreements are forbidden, the initiative doesn’t appear to have had much effect on the size of the top salaries.
However, new rules being prepared in Europe could have an impact on Swiss pay. The European Union’s new shareholders’ rights directive (SRD) requires a binding vote by shareholders on remuneration policy and a non-binding vote on the individual salaries of executives.
Firms must also disclose the relationship between the highest and lowest pay packages. The directive must be implemented by June 2019.