CEO remuneration structure

Report
CEO REMUNERATION IN EUROPE
CEO REMUNERATION IN BELGIUM
PRESS INFORMATION
1
STUDY & SAMPLE
ABOUT THE STUDY
Conducted by Vlerick’s Executive Remuneration
Research Centre
Yearly study
Based on analysis of annual/remuneration reports
Focus:
Remuneration levels: total, fixed, short-term incentives,
long-term incentives
Remuneration structure:
Proportion fixed, short-term incentives, long-term incentives
Design of share-based remuneration
Remuneration drivers:
KPIs used in short-term incentives
Importance of size, country, performance
4
© Vlerick Business School
THE SAMPLE
650
5
© Vlerick Business School
CEO REMUNERATION INSTRUMENTS
Fixed
remuneration
Short-term
incentives
Long-term
incentives
© Vlerick Business School
V
A
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I
A
B
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T
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T
A
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E
M.
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CEO REMUNERATION IN EUROPE
TOTAL CEO REMUNERATION
Firm size
2012
(2007)
<500 mio. €
Between
500 mio.
and 1 bio. €
Between 1
bio. and 5
bio. €
> 5 bio. €
Belgium
530.000
(410.000)
860.000
(n/o)
980.000
(630.000)
1.980.000
(2.390.000)
France
250.000
(380.000)
530.000
(400.000)
1.090.000
(1.490.000)
2.290.000
(3.160.000)
Germany
760.000
(n/o)
n/o
(n/o)
1.235.000
(1.730.000)
3.100.000
(3.340.000)
Netherlands
480.000
(n/o)
860.000
(830.000)
875.000
(1.330.000)
2.470.000
(2.920.000)
n/o
(n/o)
n/o
(n/o)
2.950.000
(n/o)
4.710.000
(n/o)
UK
8
© Vlerick Business School
CEO REMUNERATION STRUCTURE
Fixed-STI-LTI (in
terms of total
remuneration)
Belgium
9
2012
70%-21%-9%
France
66%-23%-11%
Germany
41%-39%-20%
Netherlands
61%-22%-17%
© Vlerick Business School
CEO REMUNERATION STRUCTURE
10
% fixed in
total
2007
2012
Belgium
59%
70%
France
47%
66%
Germany
33%
42%
Netherlands
46%
61%
© Vlerick Business School
CEO REMUNERATION STRUCTURE
% STI in
terms of
fixed
remuneration
(total assets)
Belgium
France
Germany
Netherlands
UK
0,5–1 bio. €
58%
58%
n/o
50%
n/o
1–5 bio. €
51%
74%
83%
49%
90%
> 5 bio. €
61%
100%
122%
59%
102%
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% of firms granting sharebased remuneration
SHARE-BASED REMUNERATION
12
80%
72%
70%
60%
50%
45%
49%
45%
50%
40%
30%
20%
10%
0%
© Vlerick Business School
24%
23%
26%
2007
2012
SHARE-BASED REMUNERATION
Type of share-based
remuneration
2007
2012
27%
15%
Stock options – performancebased vesting
6%
9%
Shares – time-based vesting
8%
7%
Shares – performance-based
vesting
13%
20%
Stock options – time-based
vesting
13
© Vlerick Business School
14
3
CEO REMUNERATION IN BELGIUM
TOTAL CEO REMUNERATION
2007
2012
Difference
Bel-20
1.780.000
1.610.000
-11%
Bel-Mid
830.000
740.000
-12%
Bel-Small
410.000
540.000
+31%
© Vlerick Business School
CEO REMUNERATION STRUCTURE
% fixed-STI-LTI
2007
2012
Bel-20
37%-26%-30%
56%-20%-16%
Bel-Mid
50%-38%-0%
65%-35%-0%
Bel-Small
76%-22%-0%
80%-15%-0%
16
© Vlerick Business School
SHARE-BASED REMUNERATION
85%
% granting share-based
remuneration
90%
80%
70%
53%
60%
40%
50%
2007
2012
40%
22%
30%
17%
12%
20%
10%
0%
Bel-20
17
© Vlerick Business School
Bel-Mid
Bel-Small
SHARE-BASED REMUNERATION
Type of share-based
remuneration
2007
2012
44%
25%
Stock options – performancebased vesting
5%
0%
Shares – time-based vesting
7%
4%
Stock options – performancebased vesting
2%
3%
Stock options – time-based
vesting
18
© Vlerick Business School
4
WHAT DRIVES CEO REMUNERATION?
USE OF KPIS IN SHORT-TERM INCENTIVE
SYSTEMS
100%
90%
99%
99%
% of firms
80%
70%
60%
56%
50%
45%
40%
30%
20%
10%
0%
Financial
20
© Vlerick Business School
Non-financial
2011
2012
WHAT DRIVES TOTAL CEO REMUNERATION?
% of explained variance
100%
80%
60%
2007
2012
40%
20%
0%
Total assets
© Vlerick Business School
Country
Return on
assets
CHANGE IN STI – MATCHED SAMPLE
22
© Vlerick Business School

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