BONUSES
Fall in bonus and profit share payments
The proportion of earnings that UK senior and middle managers receive in the form of bonuses and profit share has fallen far more rapidly over the past two years than that for their “lower level” colleagues, according to the latest research from Towers Watson.
The key survey figures for the UK are as follows:
Senior managers in 2010 were earning on average 35.1% of base pay in bonuses and profit share, compared with 45% in 2008.
Middle managers also saw an equivalent level of decrease. The average percentage of base pay they received in the form of bonus and profit share was 12.6%, down from 16% two years ago.
Lower level employees have fared relatively better in the past two recessionary years in terms of “at risk” pay. The proportion of base pay given as bonuses and profit share for lower level employees was 9.7% in 2010, only slightly down from 10% in 2008.
%ADVERT%
EMEA comparisons
Across Europe analysis in the report shows wide variations in what senior managers were paid in bonus and profit share in relation to their more junior colleagues:
Switzerland: senior managers were rewarded with bonus and profit share at an average of 47.6% of base pay, the highest in Europe, while its lower level employees received only 7.1%.
Denmark: senior managers earned bonus and profit share worth on average 25.1%, one of the lowest in Europe, while middle managers also received a comparatively low 11.7% and lower level employees 7.7%, which is about average for that level.
--> View table of bonus and profit share as percentage of base pay (excluding sales roles) across EMEA at www.towerswatson.com/united-kingdom/press/3524.
A final word
"Bonuses and profit share are an important part of the overall reward package in most European countries. However, there are marked differences in the size of 'at risk' pay compared with base pay amongst countries as well as differences in the weight given to 'at risk' pay at difference job levels. Variable pay such as this, vitally, offers employers the ability to manage cost and performance as well as rewarding and retaining key talent. In the current economic environment it has never been more important to have tools at hand to work out remuneration in the context of strict budgets and at the same time using it to develop those employees who are vital to business success.” - Anne Severeyns, Head of Operations - Data Services EMEA, Towers Watson.
Want to know more?
Title: Global 50 Remuneration Planning Report, Towers Watson, January 2011.
Survey details: The report contains pay and benefits information across 57 countries worldwide.
Availability: For more details about the survey visit www.towerswatson.com/united-kingdom/contact/.
Towers Watson is a “leading global professional services company that helps organisations improve performance through effective people, risk and financial management”. With 14,000 associates around the world, it offers “solutions in the areas of employee benefits, talent management, rewards, and risk and capital management”. To find out more visit www.towerswatson.com.