Philadelphia (Feb. 2, 2004) -- Although U.S. executives still reign as the most highly compensated, their counterparts in Europe are slowly closing the gap when it comes to paychecks and bonuses, according to a study by The Hay Group, a global consulting firm.
The executive compensation survey of some 153 publicly traded companies and nearly 1,000 executives in Europe showed that total cash compensation, comprised of base salary and annual bonuses, between U.S. and Europe has begun to converge. As an example, the survey showed that among companies with sales of at least $35 billion, both Europeans and Americans at the chief executive level earned an average of $2.4 million in total cash compensation. The European survey data was measured against results from a compensation survey conducted among U.S. executives that encompassed 63 public companies and roughly 700 executives.
However, there was one area where the gap between U.S. and European execs remains large, according to the survey. The value of longer-term incentives for U.S. executives such as stock options is more than double that for those in Europe, The Hay Group reported.
The study also showed a greater diversity of executive compensation levels and practices in Europe than in the U.S. In Europe, base salary levels were highest in the United Kingdom and the highest bonuses were paid in Germany. Long-term incentives are greatest in large French and German companies, which pay up to 30 percent above the European average. The lowest packages tend to be in the Nordic countries, which can be more than 30 percent below the continent’s average.
-- WebCPA staff
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