Consulting company Hay Group analyzed the level of compensation for top executives in different countries. The ranking considered the real income of managers in 29 countries, taking into account taxes and cost of living. At the top of the Hay Group table were Turkey, India, and Russia. Senior executives in Turkey, according to the study, receive the highest compensation. The level of disposable annual income for managers in Turkey, after taxes and cost of living, averages €79,000 per year. Thanks to the rapid development of outsourcing, India came in second, where the purchasing power of executive salaries is equivalent to €77,700. In Russia, managers receive a real income of €77,400 per year – third place in the Hay Group ranking.
Ben Frost, a consultant at Hay Group and author of the study, notes that rapid economic growth in developing countries, including Turkey, Russia, Brazil, and Eastern European states, is creating unprecedented demand for talented managers. The results of the study reflect a derivative effect: rapidly rising salaries for managers in countries that still lag in cost of living indicators.
According to the study's authors, this situation should make companies in Western Europe and the US think. It is not only about the competitive threat, but also about the battle for management talent. In developing countries, compared to the Old World, managers are offered significantly higher amounts of disposable income, making these regions more attractive for executives.
Western Europe looks unimpressive in this context: the UK ranks 23rd (€47,000), France is in 20th place (€51,000). Germany, considered the economic center of Europe, took only eighth place. Here, the purchasing power of senior executives' salaries is estimated at €75,700.
Only Switzerland confirmed its status as a high-income country, being the only Western European country in the top five of the ranking – in fourth place with a figure of €77,000. It should be particularly noted that this is a country traditionally considered very expensive: these figures mean that Swiss managers in absolute terms receive higher amounts than their colleagues in other countries.
Scandinavian countries, due to high tax burdens, ended up among the laggards. Denmark is in 22nd place, Norway in 25th, Finland in 28th. Sweden closes the ranking in 29th place, where the level of compensation for managers after taxes and cost of living is equivalent to €37,650.
It is worth noting that the US also loses to Turkey, Russia, and, for example, Poland. American managers on average receive compensation equivalent in purchasing power to €62,000. Japan, which has overcome a decade of economic stagnation, is in ninth place in terms of executive compensation (€70,000 in real equivalent). Ben Frost notes that deflation in Japan, which led to a lower cost of living, provided additional support for the growth of managers' purchasing power.
Natalya BOKAREVA.