LONDON: A survey of Europe’s fifty largest companies shows that French firms offer their senior executives the highest long-term incentives in Europe, typically 2.7 times salary versus the European average multiple of 1.2.

The findings were revealed in a survey of European executive remuneration, conducted by London-headquartered Hay Management Group.

However, Hay is out of step with many of its management consulting rivals, most of whom finger UK bosses as Europe's fattest cats.

Hay's director of executive rewards Simon Garrett explains away the discrepancy: "French pay awards tend to be higher because the long-term incentive award levels are bigger and the performance conditions tend to be lighter touch."

Or, in non-management-speak: the delivery bars have been lowered

UK firms pay their ceos the highest base salaries: around  €1.4 million ($2.05m; £1.04m) a year on average. Non-executive chairmen of UK companies are also awarded higher fees than anywhere else in Europe, on average €740,000 annually.

German companies pay the highest annual bonuses but the lowest long-term incentives, making total pay for German chief executives – with the Netherlands – the lowest in Europe.

Total averaged European executive pay, including long-term incentives, is around €5m.

All of which pales into insignificance compared with the USA, where averaged total pay for chief executives is €13m - two and a half times that of their European counterparts. But most of that sum is in bonuses and long-term incentives.

But averaged basic salaries of European chief executives (€1.3m) exceed US base salaries by 20%.

Topping Europe's 2007 pay table for individual ceos is Vodafone boss Arun Sarin, with total pay of €11.4m, including long-term incentives of €6.6m.

His opposite number in the US was Edward Whiteacre of AT&T, who harvested €18.7m, including long-term incentives of €12.2m. 

Hay's compensation calculations include: total pay, including salary, bonus and the expected award from long-term incentive schemes based on performance conditions.

They also take into account the probability of an executive achieving targets, basing this on the track record of the company and its share performance.

Data sourced from Financial Times; additional content by WARC staff