Pertinent insights from Europe on executive compensation
Baeten, Xavier ; De Ruyck, Bettina
Baeten, Xavier
De Ruyck, Bettina
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Publication Type
Journal article
Editor
Supervisor
Publication Year
2020
Journal
The Journal of Total Rewards
Book
Publication Volume
Publication Issue
Q4
Publication Begin page
62
Publication End page
74
Publication Number of pages
Collections
Abstract
Throughout this article, it became clear that there is no “European way” of executive compensation as a number of geographical differences were found to be present. However, the research shows that the variance is explained by determinants such as business size, the industry in which the company operates and the share ownership structure. The article also looked at the underlying key performance indicators used for incentive systems. Not surprisingly, financial indicators were found to be most prevalent, determining on average 70% of the bonus while company size was the main driver of CEO compensation. We found that CEO compensation policies in the best performing companies, over a longer period of time, are characterized by modesty. This applies to compensation levels, the weight of incentives in the total package, and the spread between target and maximum bonus.
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Keywords
Rewards, Executive Compensation