Magazine article Global Finance

Where It Pays to Be CEO

Magazine article Global Finance

Where It Pays to Be CEO

Article excerpt

While US chief executives make the most money, those in Brazil and Hongkong do well, too.

If your ambition is to be a well-paid chief executive, work in Brazil if you can't find a job in the United States. A 23-country survey of executive compensation in medium-size industrial companies (average annual revenues of $250 million) conducted by Towers Perrin found US CEOs made an average $901,181 in 1997. Second place, perhaps surprisingly, went to Brazilian CEOs, who brought in $697,991, followed by those in Hongkong. The best-paid European CEOs are in France, where they make an average $523,511.

The least attractive places to be CEO? New Zealand, where average remuneration amounted to just $183,233, and South Korea, where CEOs averaged only $189,381, according to the employee benefit consulting firm.

Towers Perrin's definition of total remuneration includes basic compensation (annual salary), bonuses, company contributions (social security, life insurance, disability, and retirement packages), perquisites (cars, club memberships), and long-term incentives (most notably, stock options). While the numbers would be greater for CEOs of larger companies, the general trends hold true, says Michael Keppler, international human resource consultant at Towers Perrin: US CEOs still make the most money, followed by those found in roughly the same countries as in the medium-size corporate ranks.

Everywhere, the trend is toward continuing growth in compensation, although the formula is changing due to attempts to tie pay to performance. In many markets, "companies are putting more emphasis on variable compensation," says Keppler. "We see this not only at the executive level but increasingly at lower levels as well." Some countries are farther along on the long-term incentive curve than others. In the United States just 42% of total remuneration came from salary, and 28% from long-term incentives, compared with 48% and 12%, respectively, in Brazil. …

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