Friday, March 02, 2007
Shares And Bonuses Account For Three-Quarters of Executive Salaries
2nd Mar 2007 - The Personnel Today.com
Shares And Bonuses Account For Three-Quarters Of Executive Salaries In The USShare options, bonuses and other perks account for all but a quarter of executive pay packages, with share incentives worth an average of 60 pctof salary for chief executives and 29 pct of salary for senior-level executives (below board level), according to research.
The Executive Reward Survey of more than 1,900 senior executives by HR consultancy Watson Wyatt indicated that most companies underestimate the value of their share options, believing them to be worth about 30 cct of salary.However, getting a bonus or share option has become tougher in recent years. Ms Sue Bartlett, a senior reward consultant at Watson Wyatt, said: "Performance conditions have become tougher following shareholder pressure, with many plans using multiple conditions, or requiring exceptional levels of performance for a full payout.
There have also been changes in financial conditions, especially a decrease in general levels of share price volatility, which have led to a reduced chance of significant payouts from options, and hence lower values." Last year, FTSE 100 chief executives saw their pay rise, on average, 43 pct to £2.9m - just £730,000 of which was made up by salary. The rest was made up of bonuses, share options and added perks.
Shares And Bonuses Account For Three-Quarters Of Executive Salaries In The USShare options, bonuses and other perks account for all but a quarter of executive pay packages, with share incentives worth an average of 60 pctof salary for chief executives and 29 pct of salary for senior-level executives (below board level), according to research.
The Executive Reward Survey of more than 1,900 senior executives by HR consultancy Watson Wyatt indicated that most companies underestimate the value of their share options, believing them to be worth about 30 cct of salary.However, getting a bonus or share option has become tougher in recent years. Ms Sue Bartlett, a senior reward consultant at Watson Wyatt, said: "Performance conditions have become tougher following shareholder pressure, with many plans using multiple conditions, or requiring exceptional levels of performance for a full payout.
There have also been changes in financial conditions, especially a decrease in general levels of share price volatility, which have led to a reduced chance of significant payouts from options, and hence lower values." Last year, FTSE 100 chief executives saw their pay rise, on average, 43 pct to £2.9m - just £730,000 of which was made up by salary. The rest was made up of bonuses, share options and added perks.
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