International
Global Executive Pay 2006; Senior executives in the US earn the highest salaries
By Finfacts Team
Mar 30, 2006, 09:34

• Companies in the US pay highest base salaries and annual total cash for finance and marketing directors; those in India pay the lowest
  
• Finance directors are generally paid most, but marketing directors earn more in Germany, Poland, and Hungary
  
• Highest base pay for HR directors found in US, while their counterparts in Germany receive highest annual total cash
  
• Multinational organizations rely on global pay data for sourcing talent and determining work locations

[*Annual total cash refers to the total of annual base salary plus any guaranteed cash plus the actual annual short-term incentive amount.]

Steve Gross, Global Leader of Broad-based Rewards at Mercer said: “Salaries and annual total cash are generally higher in the US because there is greater competition for talent and employers must pay more for top employees.”

The research is part of Mercer’s 2006 Global Pay Summary, which provides base salary and total cash compensation for 50 job positions** in 50 countries worldwide. The benchmark data is used by multinational organizations to set pay levels for employees globally.

[** The positions covered in the full Global Pay Summary reflect entry-level roles to management roles in 11 major job families: administration; corporate affairs; engineering; finance; general management; human resources; information technology; operations; research and development; sales and marketing; and supply and logistics.]

“Global pay data helps multinational companies make decisions about sourcing employees and where to set up overseas operations. Factors such as retention costs, availability of skills, and productivity influence market rates and determine what an organization must pay to attract and retain talent in the respective locations,” said Mr. Gross.

Finance directors

US-based finance directors are the highest paid, earning US$250,000 on average, followed by those in Canada and the UK, who receive around US$186,400 and US$180,300 respectively. Their counterparts in Hong Kong, Italy, and Germany also earn above-average base pay, at US$168,500, US$159,000, and US$154,400.

Annual total cash for finance directors follows the same pattern as base pay. US-based finance directors are the highest paid, earning annual total cash of US$324,600 on average, followed by those in Canada and the UK, who receive approximately $262,700 and $236,600, respectively.

At the lower end of the spectrum, finance directors in Hungary and India receive less than average for this position – earning a base salary of approximately US$59,800 and US$53,800. Average base pay for this role in Poland is US$108,200.

Mark Edelsten, a principal at Mercer, commented: “In many organizations, finance directors are the second-highest-paid individuals, receiving only slightly less than the CEO. The scope of their role has widened in recent years as new regulatory burdens and risk management responsibilities make them increasingly accountable for company governance.” 

Finance directors Country Annual base salary (US$) Annual total cash (US$) US 250,000 324,600 Canada 186,400 262,700 UK 180,200 236,600 Hong Kong 168,500 212,000 Italy 159,000 197,500 Germany 154,400 202,300 France 148,300 179,500 Australia 146,400 175,700 Brazil 140,500 205,700 Spain 132,800 146,400 Singapore 125,800 162,900 Poland 108,200 128,000 Hungary 59,800 77,500 India 53,800 63,800

Marketing directors

Base pay for marketing directors ranges between US$203,100 in the US and US$40,000 in India. Marketing directors in the US are followed by those in Italy and the UK, who are paid around US$169,100 and US$167,800.

Marketing directors in the US also receive the most annual total cash, followed by those in the UK, Germany, and Italy.

While Hungary and Poland still feature toward the bottom of the rankings, interestingly, pay for marketing directors in these countries and Germany is higher (US$91,000, US$110,600, and US$165,000) than that for finance directors.

“Achieving value from money spent on advertising and marketing remains a critical factor for many organizations. The high levels of pay for marketing directors in some countries reflects the fact that marketing and brand management are now considered key to enhancing company performance,” said Mr. Edelsten.

Marketing directors Country Annual base salary (US$) Annual total cash (US$) US 203,100 261,200 Italy 169,100 201,100 UK 167,800 217,200 Germany 165,000 210,600 Canada 148,600 191,800 Hong Kong 143,200 175,800 France 132,400 156,100 Spain 128,400 146,000 Australia 126,100 154,100 Brazil 123,400 180,500 Poland 110,600 130,800 Singapore 109,100 142,000 Hungary 91,000 100,300 India 40,000 47,200

Human resources directors

HR director is the lowest paid role of the three positions covered. The best paid HR directors are found in the US, UK, and Germany where employees can earn US$175,000, US$161,900, and US$160,500 respectively. Annual total cash for this position is highest in Germany, at US$227,500, followed by US$219,000 in the US and US$202,500 in the UK.

Again, employees in this position working in Hungary and India earn significantly less annual base pay than in those in other countries – receiving around US$57,100 and US$47,900 respectively.

Gross said, “Bonuses increase pay significantly for many positions. Although HR directors in the US receive the highest salaries, those in Germany are paid most in terms of annual total cash. This reflects the value placed on HR directors in steering their companies and dealing with the various works councils.”

Human resources directors Country Annual base salary (US$) Annual total cash (US$) US 175,000 219,000 UK 161,900 202,500 Germany 160,500 227,500 Hong Kong 149,500 186,600 Italy 148,800 178,200 Canada 145,805 188,600 Brazil 134,900 200,000  France 130,300 147,500 Australia 124,400 143,400 Spain 124,200 147,400 Singapore 120,800 155,700 Poland 96,100 111,200 Hungary 57,100 71,800 India 47,900 55,700

Notes: The pay figures above are rounded to the nearest $100.

Job descriptions

Finance director – formulates strategies, policies, and procedures, including sales, costing, tax, asset, budget, credit, and cash flow management.

Marketingdirector – leads the marketing department; direct marketing strategy on product positioning, market penetration, and pricing.

Human resources director – responsible for the strategic planning of the human resource function, including recruitment, training, organization development, compensation, and employee relations.