Blog : BOARD TALK
|Posted on January 24, 2013 at 10:55 AM|
We may be making some progress appointing more women to boards of plcs across Europe, but - surprise, surprise - we are not paying them as much as men. This is partly because women are still not being appointed to the "top-paying, strategically important committee roles" and "barely two per cent" (in case you missed that, 2%) of non-executive chairs across Europe are held by women.
There is an 'actual pay gap' of 9% between male and female board members in Europe 2012 (and then there's Bella Italia, with a 22% gap) - which represents a widening from 7% in 2011. Can it be that the women are so grateful to get the role they take less money for it ? (shhh, did I say that?)
A look at pay patterns in boardrooms across Europe from global management consultancy Hay Group reveals that only Sweden increased director pay , ie the median 'policy pay' or the rates a company says it pays non-executive directors (NEDs) for services - with intent (by 5%). in general NED pay remained frozen year-on-year in most countries.
But there is a difference between 'policy pay' or intent, and 'actual pay' or what is paid out throughout the year for meetings attended, committees sat on etc. This 'median pay' for non-chair directors across Europe rose slightly from €71,500 in 2011 to €75,200 last year - but dropped for non-executive chairs from €237,900 in 2011 to €214,800. A potentially interesting disconnect between what the role is meant to do and what the person in the role does, or too small to concern oneself with....
The EU may be keen to rule on the issue of female representation and quotas, but will it also be as keen to remove discrepancies on pay across Europe plc ? We could always start with gender, as we are there already.
What's clear is that if you want to be the fattest cat among the European chairs, go to Switzerland. Chairs there took home by far the most money last year (median of €1,077,100) while those in neighbouring Austria earned the least (€51,600). This trend was reflected too for general directors, who earned €251,200 in Switzerland in 2012, but just €20,500 in Austria.
It fascinates me that a role that can't be that different between one European plc from another commands such a discrepancy in pay.
National values do play a part, it seems. According to the study, one factor that varies significantly across Europe is the differential between director pay and the pay of the chair of the board. Chairs of Italian companies are the most highly paid compared to other board directors, earning over five time the amount. in The Netherlands, on the other hand, chairs of companies earn approximately 1.3 times as much as other board directors.
I haven't read it all, but I think there's nothing here about what headhunters charge to find NEDs and chairs at plcs across Europe. But that's interesting too, across sectors. The chairman of a major bank was grumbling to me just the other day about that subject.....and what you have to pay to get anyone to do it.
This valuable report, Non-Executive directors in Europe is based on analysis of the latest annual reports from 390 companies listed on the major indices of 12 European countries. It wasn't on the Hays website when I last looked- but you can get it, I'm sure from firstname.lastname@example.org.