Welcome to our third Global Top 250 Compensation Survey.

This report presents information on compensation levels for the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), the design of long-term incentives (LTI) and share usage at the 250 largest listed companies globally.

Constituents of the Global Top 250

The Global Top 250 is made up of the largest 250 listed companies worldwide by market capitalisation (as of December 31, 2023). In determining jurisdiction, companies’ primary exchange listing has been used. Based on geographic region, 59% of the constituents are made up of companies from the Americas, 23% from Europe & Australia and 18% from Asia. In Asia, state-owned enterprises are replaced by other leading Asian companies. We categorise Europe and Australia together as pay practices in Australia has historically lent more on European (particularly the UK) than of Asia.

These broad categories mask nuances of remuneration within continents, but such categorization provides for a fair overall picture of differences between each group.

To provide an overview of how compensation practice varies between jurisdictions, we have analysed practices and levels between these three regions and also provided data, where available, on the jurisdictions with the most companies in the group. Note that the data points among some Chinese companies are limited as pay levels of the senior executive team are either disclosed in aggregate or only total compensation is reported on an individual basis.

Notably, some companies have not presented the compensation of their CEO and/or CFO in their most recent disclosures, and we have excluded these companies from the analysis where appropriate.

INTRODUCTION

The following illustration below provides a breakdown of the constituents by industry classification.

Industry Breakdown of the Global Top 250

The median market capitalisation of the companies within each region and within the largest jurisdictions are shown below.

Data Presentation

In much of the analysis that follows, we have presented a quartile analysis of the data, broken down by region and jurisdiction. We have labelled these as the 25th percentile (lower quartile), 50th percentile (median) and 75th percentile (upper quartile). To ensure statistical accuracy, medians are presented only when at least three data points are available, and the upper and lower quartiles are presented only when there are at least five data points.

Because the companies vary in size, comparing pay levels across different geographies can be misleading. To adjust pay data to reflect scale, we prepared a line of best fit [2] which provides a more comparable and balanced view on compensation differences between jurisdictions.

Data points above the line of best fit represent companies that pay above the global “average” level after adjusting for size and those below the line of best fit represent companies that pay below this level. An illustration follows:

The chart to the above left shows the compensation element (in this case, base salary) regressed against the market capitalisation of each company, along with the size-adjusted line of best fit. The chart to the above right shows the percentage difference between actual compensation paid at each company and the line of best fit.

A line of best fit analysis provides a broad assessment based on the relative size of companies, but additional factors should be considered when analysing market pay levels across geographies. Factors to consider include industry, revenue and profitability, growth trajectory, cost of living and other company-specific criteria.

Refer to the “Methodology” section for further details on the data presented in this report.

Retirement Benefits

Retirement benefits vary considerably between jurisdictions, both in terms of the specific arrangements and value. The position is further complicated as the costs of such provision may not directly be borne by the employer, with some countries providing largely uncapped arrangements through social security provision. Given the differing levels of disclosure, such arrangements have been excluded, which should be borne in mind when considering the analysis.

EXECUTIVE SUMMARY

While pay practices vary significantly between and within jurisdictions, we have been able to identify certain patterns in the compensation of CEOs and CFOs between the Americas, Europe & Australia and Asia.

• Pay levels in the Americas are, overall, higher than in the other jurisdictions, although this is not driven from base salaries, which are more modest than in Europe & Australia. It is the greater performance related pay and, in particular, the size of the long-term incentive awards for US executives that results in the higher total compensation.
• In general, base salaries in Europe & Australia are higher than in other jurisdictions, with total cash compensation (i.e. base salary plus annual bonus) being only marginally below those seen in the Americas, which is consistent with what we observed in the previous iteration of our study. Long-term incentives are considerably more modest in Europe & Australia, and total pay is significantly lower than in the Americas as a result.
• Pay levels among Asian companies are generally lower than in other regions, influenced by factors such as lower living costs, reduced inflation, and the economic development stage of many Asian countries. Structurally, there is stronger emphasis on cash compensation, with some short-term incentives linked to profit sharing. Additionally, some Asian companies either do not grant long-term incentives annually or do not provide them at all.
• In the Americas, there exists variation in pay structure and pay mix between CEOs and CFOs, with CEOs having greater emphasis on variable pay, particularly long-term incentives. This is reflective of the “star culture” in the US, where the CEO is often considered to be the main driving force behind a company’s strategy and performance and is, therefore, highly incentivised.
• • Conversely, pay structure is broadly similar between CEOs and CFOs in Europe & Australia, with base salary being the main differentiator (other elements of pay being driven off that level). This is partly led by the United Kingdom, where the CFO is typically on the Board, and by limited disclosure in some other jurisdictions where this is less likely to be the case.
• In Asia, pay is generally similar between CEOs and CFOs in terms of structure, compensation mix, and levels given collective accountability in key decisions.

Below, we outline some of the key features of CEO and CFO compensation between the three regions.

Total pay levels are higher in the Americas than in Europe & Australia or Asia, although at median a significant portion of the total package (92% for the CEO and 87% for the CFO) is tied to annual bonus and long-term incentives and the majority of the package (78% for the CEO and 69% for the CFO) is weighted towards long-term incentives.

Total pay levels are lower in Europe & Australia than in the Americas (but higher than those in Asia) and, although at median a significant portion of the total package (73% for the CEO and 71% for the CFO) is performance-linked, this is a much smaller proportion than is the case in the Americas, with pay at median split more equally between base salary, annual bonus and long-term incentives in Europe & Australia.

Total pay levels are, therefore, lower in Asia than in the Americas and Europe & Australia due to lower annual bonus or long-term incentives as a percentage of base salaries. However, the weighting of the total package, at median, is more skewed toward performance-linked elements than fixed compensation (67% for both the CEO and the CFO at median is performance-linked). This is due to a stronger emphasis on aligning executive rewards with business goals and competitive market dynamics. Additionally, increasing focus on corporate governance has led to a push for more performance-oriented compensation packages.

A link to the full report can be found here. 

1Reflects market capitalisation and currency conversion rates as of December 31, 2023.(go back)

2The “line of best fit” shows the implied compensation level across the range of market capitalisations based on the logarithmic regression trend line that is formed by plotting the compensation and market capitalisation data against each other.(go back)