Asian CEOs Earn Half and Face 14x Incentive Gap Compared to U.S. CounterpartsHONG KONG, January 23, 2025 – According to a global survey report by Pretium Partners, Frederic W. Cook & Co, and FIT Remuneration Consultants, significant disparities exist in CEO compensation across Asia. The median salary for Asian CEOs is only half that of their American and European counterparts. Additionally, long-term incentives as a percentage of salaries for American CEOs and CFOs are 14 times and 8 times greater than those of their Asian peers, respectively.
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The Global Top 250 compensation survey 2024 examines pay levels and trends among the largest 250 publicly listed companies by market capitalization, focusing on base salary, bonus, total cash compensation, and long-term incentives for CEOs and CFOs.
Key findings from the recent survey include:
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Notable findings on long-term incentives include:
- LTI Prevalence: Although the prevalence of LTIs is comparable to that in the Americas, many Asian firms grant them less frequently.
- LTI Target Percentage: U.S. CEOs and CFOs have LTI target percentages 14 times and 8 times higher, respectively, than their Asian peers. Additionally, some Asian companies grant LTI base on a percentage of total outstanding shares rather than a percentage of base salary, resulting in significant variability in the interquartile range of these incentives.
- Performance Range: American and Asian firms permit performance vesting from the lower to upper quartile, while European firms typically operate between the median and upper quartile.
- Payout Range: American and Asian companies establish target award levels with defined thresholds and maximums, usually ranging from 50% to 200% of the target. In contrast, European and UK firms base awards on a maximum number of shares, with vesting percentages generally between 25% and 100%.
“As Asian companies expand their global footprint, it is crucial to rethink the role of long-term incentives within the executive compensation package, stated May Poon, Managing Partner at Pretium Partners. "By harnessing local market insights and leveraging global innovative incentive strategies, Asian firms can strengthen long-term incentives that not only align interests more effectively but also drive sustainable growth."
About Global Top 250 Compensation Survey 2024
This survey offers a comprehensive analysis of executive compensation trends across Asia, the U.S., and Europe, focusing on base salary, total cash compensation, and long-term incentive structures. It draws on data from the 250 largest publicly listed companies by market capitalization as of December 31, 2023. In Asia, state-owned enterprises are substituted with other prominent Asian companies. The data was sourced from publicly available company filings up to March 31, 2024, highlighting compensation practices for CEOs and CFOs.
This survey offers a comprehensive analysis of executive compensation trends across Asia, the U.S., and Europe, focusing on base salary, total cash compensation, and long-term incentive structures. It draws on data from the 250 largest publicly listed companies by market capitalization as of December 31, 2023. In Asia, state-owned enterprises are substituted with other prominent Asian companies. The data was sourced from publicly available company filings up to March 31, 2024, highlighting compensation practices for CEOs and CFOs.
About the Authors
Pretium Partners, Frederic W. Cook & Co., and FIT Remuneration Consultants have collaborated for several years to offer clients a comprehensive global perspective on executive compensation. Their joint efforts have culminated in the third edition of the Global Top 250 Compensation Survey 2024, which reveals critical insights into the evolving landscape of executive remuneration. This partnership harnesses deep industry expertise and data-driven analysis, enabling organizations to effectively navigate the complexities of global compensation practices.
Pretium Partners, Frederic W. Cook & Co., and FIT Remuneration Consultants have collaborated for several years to offer clients a comprehensive global perspective on executive compensation. Their joint efforts have culminated in the third edition of the Global Top 250 Compensation Survey 2024, which reveals critical insights into the evolving landscape of executive remuneration. This partnership harnesses deep industry expertise and data-driven analysis, enabling organizations to effectively navigate the complexities of global compensation practices.
SOURCE: Pretium Partners Asia Limited