• Base salaries set to increase by 4.5% for 2008

• Increased provision of flexible benefits by employers to reflect work-life balance needs of employees 

• The number of employees in DC plans are on the increase

• Typical company car provided to executives – BMW Series 3 

Executive pay levels in Ireland are set to increase by 4.5% for 2008, remaining at the higher end of salary increases Europe-wide (2.2% - 5%), according to Mercer’s Total Remuneration Survey.

Actual salary increases in Ireland were 4.5% in 2007, marginally higher than the actual salary increases seen in 2006. Head of Organisation roles have seen salary increases of up to 5% of base salary in Ireland this year.

High demand for certain positions has fuelled above average pay increases in 2007; professionals in finance, tax, compliance and sales have seen the highest increases – up to 9% - in this buoyant labour market.

Mary McDermott, Senior Consultant at Mercer noted that there has been a pronounced shift away from share options to restricted stock and performance related share plans, largely driven by the increased focus on paying for performance, the need to retain key employees and the change in accounting for share options. McDermott commented: “Companies are recognising that they need to vary their compensation structure and benefits package for employees with specialised skills in order to retain key talent in a competitive environment.”

Flexible benefits provisions and sabbatical programmes are becoming increasingly popular, as employers focus on the increasing need to provide for a work-life balance in their workplace. The average number of vacation days typically offered has increased to 23 days across all industry sectors, with a maximum of 25 days for Head of Organisation roles.

Healthcare has become a standard benefit in most organisations, typically with a choice of provider. The number of employees in defined contribution plans are on the increase, with companies generally contributing between 5% to 10% of base salary. Defined benefit plans are frequently closed to new entrants.

McDermott noted: “The anticipated reduction in provision of company cars has not materialised, rather, we have seen an increased offering of ‘choice’ of company car or car allowance.” The BMW 3 series is the typical company car provided to executives, with their annual cash allowances varying from €18k to €23k.

Companies that traditionally would look to the London market for specific professional roles have now to consider the additional cost of living differential between the two cities. According to one of Mercer’s cost of living indices, elements of cost of living in Dublin are exceeding London.

Mercer’s Total Remuneration Survey (TRS) covers almost 300 benchmark positions, from senior executive roles to junior administration roles, across all industry sectors in Ireland. It includes a valuation of the total compensation package, including base salary, bonuses, incentives and non cash benefits, and an overview of all benefits.