Salary and compensation of executives in Germany on the rise

01 November 2018 Authored by Consultancy.eu

Chief Executive Officers of DAX listed companies earn nearly twice as much as their other board members, and more than double the amount of their CEO colleagues at MDAX organisations, according to a new study. 

The findings, drawn from the ‘2018 Compensation Study’ conducted by professional services firm PwC in collaboration with Frankfurt-based Goethe University, show that across the board, compensation for top business leaders in Germany has grown over the past four years. The researchers assessed compensation data for all executives of companies listed on the Dax, MDax, SDax, and TecDax for the years 2014 – 2017. 

CEOs of DAX companies – the 30 major German companies trading on the Frankfurt Stock Exchange – earned a median total compensation of €6.2 million in 2017, 8.6% more than in 2016 and 13.6% more than in 2014. The number is almost twice as much as the other board members (CXOs) of DAX companies, who bagged €3.3 million last year.

Compensation of executives in listed German companies (€ million)

The median total compensation of CEOs of mid-cap listed companies (listed on the MDAX stock exchange) was €2.8 million in 2017. This was 7.1% less than the level noted in 2016, but still 10% more than two years prior to that. On average, since 2014, their compensation has increased by an average of 3.2% per year. Their CXO peers saw their compensation package grow by 5.9%.

While the authors consciously decided to use the median as the main KPI, instead of using the average, they highlight that variance in data-sets should be noted. For instance, in the DAX data-set, the company with the lowest market capitalisation had a value of €6.6 billion, while the largest peer had a staggering value of €112.1 billion. In the MDAX index the variance is even higher: €1.8 billion for the smallest player opposed to €64.3 billion for the largest player. 

A CEO of a SDAX company received a compensation package of €1.6 million in 2017, while a TecDAX CEO pulled in some €200,000 more.

The authors further found that despite all the focus on diversity in boardrooms, the gender distribution of the CEO population is strikingly poor: 97% of all Chief Executive Officers are male, a slight improvement from the statistic in 2014 (99%). In supervisory boards, the share of males holding a chairman role stood at 96% last year. Beyond the top role, women have a higher representation (e.g. CxO, Vice Chariman, etc). 

Earlier this year, a study by German-origin consulting firm Simon-Kucher & Partners found that one third of DAX executives are migrants.

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