European Top Executive Compensation Survey - PowerPoint PPT Presentation

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European

Top Executive

Compensation Survey

Presentation - WECBF Meeting

Dublin March 22, 2007

About

Created by Michel de Tymowski in 1999
MDT credentials
Specializes in Reward Management
Work with a network of independent consultants
Started sponsored survey business in 2003

2003 - Company Car Survey - HQs positions
2004 - 2005 Compensation & Benefit Survey - Nigeria
2005 - 2006 European Top Executive Compensation (TEC) Survey

Major clients :
Amadeus Bunge Compaq Getronics Hewlett Packard IATA
JTI Medtronic Orange Philip Morris RJ Reynolds Serono
SGS Tag Aviation Temenos WEF

European Top Executive Compensation Survey

Current Issues

Were you ever confronted with issues such as having to assess the competitive pay level of your international executives with multi-country, regional or even worldwide responsibilities?
Where such information can be found?
In Europe such data tends to be highly confidential and very difficult to access.
Many organizations, to address this problem, extrapolate executive data from US annual reports. Does it make sense? It is one source, but how reliable when exchange rates have been so volatile these past couple of years. And the US are not Europe!
Some countries appear better covered survey wise on competitive remuneration, while others have no information at all requiring a lot of imagination and/or educated guess from compensation gurus to establish estimated salary levels.

Current Issues

Today's competitive Executive Compensation is no more limited to a specific country remuneration where a headquarter is established.
We are competing within a global market in which Europe is one of the key players.
When it comes to Executive Compensation, Corporations need to be aware of how much an executive should be paid in Europe, not only in the country where he or she is paid from.
This is the backbone of the TEC survey.
No other surveys on the market will bring you such global coverage and flexibility within one product!

Competitive Market Surveys

Some big players out there

Towers Perrin

INSitE
Country HQs survey

Hay

PayNet

Mercer

iMercer

Watson Wyatt

Compensation report - CompTrack

Hewitt

Country HQs survey

Major European Clubs :

Consumer Group WECBF Mercer
High Tech Group HP European Mgmt Survey Western Management
Pharma Group EPEX Hewitt
Finance Sector In Bank Towers Perrin

The Survey

A new Compensation Survey concept developed by professionals having solid C&B Corporate and Consulting experiences
It addresses exclusively Senior European Executive Management compensation packages
Because of its distinctive design, it is a reliable source of information for Corporations to assess :

its senior management compensation levels
specific/hybrid executive positions usually not covered by conventional surveys or that are hard to match.

TEC Background

TEC concept developed in 2003 and 2004

Survey initially developed for Compaq senior executive group
Job matching system derives from the COMPASS computer aided job evaluation system initially designed and developed at Mercer by MDT
Light version adopted by the FCG Forum group in 1994,1995 & 1996
Used for HQs surveys in Switzerland and local surveys in East Europe
COMPASS went into further development to become NETCOMP in 1999
NETCOMP job evaluation system fully integrated into the TEC program

TEC launched in 2005 with the support of Philip Morris and Hewlett Packard

Why TEC ?

The survey focuses on senior executive positions throughout Europe with international responsibilities
It is built around a user friendly database application enabling you to model various scenarios
It focuses specifically on individual remuneration data
There is no extensive policy questionnaire to be completed
It has a "Cafeteria approach“

Why TEC ?

The report is run and customized by the participant
It is a dynamic database (updated on a bi-annual basis)
Positions can be mixed (and compared) across Europe as we provide a Country Salary Coefficient (CSC) factor in the TEC application
Unique positions (usually not covered in any surveys) can be simulated through the application using the TEC built-in position evaluation module

Our Competitive Edge

We have a long experience in surveys, either as users (Watson Wyatt, Hewitt, Towers Perrin, Hay, Mercer, and Western Management surveys) or as previous consultant with Towers Perrin, Mercer and MCS.
As a result, we better understand what the customer is looking for!
We believe that the TEC survey and the way it is designed will fill a gap that currently exists today in European Executive Compensation.
Due to the way we are structured, the overall TEC design and process are performed by experienced and dedicated compensation consultants.
No work is, or will be, delegated to junior staff. This ensures the utmost quality of the output

Survey Design

Some of the features of this survey are quite unique and are structured as follows:

15 top benchmark positions within six regional/divisional levels for a reported entity (up to a total of 81 positions throughout Europe, from Corporate down to Area levels)
Cash compensation is the main driver
Data security is ensured through a multi password process
In addition survey results on the website cannot be read without the initial application which resides at the participant's site location

Survey Design

Some of the features of this survey are quite unique and are structured as follows (continued) :

Beside the job code to identify the position to be reported, each job is individually assessed through a position evaluation process which is integrated into the TEC program survey
As the survey covers positions within multiple countries, the Country Salary Coefficient (with preset values that can be modified by the participant) will be provided for each country to enable cross-European job analysis

Survey Design

One of the unique features of the TEC survey is the possibility for the participants to make their own customized reports

comparing any executive jobs in their organization with the surveyed positions (by combining one or more positions)
the option to select specific industry sectors
the companies reported data by geography (within one country, or multi-countries)
the revenue dimension
the evaluation score

Participant

Selection

Head of Regional R&D &

Head of Regional Engineering

Head of Corporate Legal &

Head of Regulatory Affairs

Head of BU Finance &

Head of Regional Finance

Head of BU Finance

Position(s)

Consumer Goods &

Fast Moving CG

Industrial Goods &

Consumer Goods

Pharma/Chemical

All

Sector(s)

Germany & France

All

Germany

F, UK, G, CH

Geography

Euro 3 - 5 bio

All

Below Euro 1 billion

Euro 1 – 3 bio

Dimension

> 500 pts

All

> 200 pts & < 400 pts

< 400 pts

Evaluation score

Position Report

Output 4

Position Report

Output 3

Position Report

Output 2

Position Report

Output

Position Report

Output 1

Survey Design

With the country selection, you can define the different pay values of executives in any of the countries covered by the survey. This can also be used for evaluating expatriate transfer salaries.
Another key feature, is the possibility to assess the value of any executive profiles by using the job matching program built-in the TEC program

It will deliver a point value for any jobs you will enter into the system (whether or not the position is listed in the survey)
The program gives you the opportunity to store in the program your own specific positions
For Hay user, a point equivalence chart can be provided

Survey Design

This point value results from the job matching process which is part of the database questionnaire.
It is structured around a multiple choice questionnaire
The evaluation table is built around six main factors and is the heart of the survey.
A. Qualification C. Organizational Resources E. Leadership
B. Communication D. Organizational Effectiveness F. Challenge
Each factor has a number of corresponding sub-factors with multiple choice questions to be entered.
The position evaluation questionnaire can be printed or directly accessed on the application as the questionnaire is built-in the program.

Survey Improvements

The survey program has a a built-in job matching process.
Following a strong request coming from a non negligible number of participants (as well as our sponsors), we have updated in 2006 our current program to include a link to existing well known evaluation systems.
As of the 2006 software version, participants using HAY, Mercer or Watson Wyatt evaluation systems can now bypass the TEC job matching process by reporting directly their point scores which is a great time saving process!
In addition, not only inputs but also output results can show the point system of their choice.
Companies having no job evaluation system in place (and doing the full job analysis of the TEC survey) produce not only TEC points, but also, if desired, HAY, Mercer or Watson Wyatt points.
Word of caution : it is not the intention of the TEC survey to replace competitive well recognized job evaluation systems, but just to correlate the results

Survey Timing

This is a dynamic database that is updated on a bi-annual basis
(April - October)

to accommodate varied focal point review timelines
new companies joining the survey at a later stage.

You can take a drawdown at any time that suits you.
The good news is that you are requested to complete the survey only once in the calendar year.
One month after the submission time, the list of participating companies will be updated on the website in order for the participants to decide whether or not they want to download the latest updated version.
Update will be required once executive merit increase process (focal point review) is implemented

TEC Participation

TEC participants list 2005/2006

Alcatel
British Petroleum
Brocade
Bünge
Cargill
ebay
Edwards Lifesciences
Hewlett Packard
Hilti
Ingram Micro
Johnson & Johnson
Kraft Europe
Masterfoods Europe

Nokia
Novartis Consumer Health
Novelis
Orange
Philip Morris Int'l
Serono
SGS
SICPA
SITA
Swiss Re
Temenos
Tetra pak
TNT

Missed the deadline

Barclay’s Bank Microsoft
Getronics Procter & Gamble
Medtronic

TEC Participation Fees

First time participant entry fees for 2007 is € 1’475.-
Continuing participants pay a flat annual fee of € 1’000.-
Fees are paid at registration
Once data provided, participant gets immediate access to the existing database
An additional 7.6% of VAT will be charged on the above fees for companies invoiced in Switzerland

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