Downward trend in the remuneration of CEOs of Belgian listed companies

European survey of the remuneration of senior executives of 899 listed companies

The CEOs of Belgian listed companies earn less than their French, German, Swiss and UK counterparts. What’s more, 40% of the Belgian companies have seen their top salaries drop over the past three years. Lastly, the CEOs receiving higher remunerations were those of companies that have fragmented shareholderships, predominantly international boards of directors, and executives with extensive networks.

This was revealed in the annual survey of the salaries of the CEOs of listed companies carried out by the Executive Remuneration Research Centre at Vlerick Business School. This year, an eleven-member team led by Professor Xavier Baeten and the Researcher Bettina De Ruyck analysed the remuneration reports from 899 listed companies. This edition included all companies that are part of the STOXX Europe 600 index, which expanded the sample to 15 countries. These companies represent 90% of the freely traded shares on European markets. In fact, the survey included all of the listed companies in Belgium and the Netherlands.

The survey analysed not only the remuneration levels but also the packages’ structures and the performance indicators used. This year, the survey looked specifically at the link between the CEOs’ remunerations and their respective boards’ compositions.

As regards the remuneration levels, the CEOs of the Belgian listed companies were shown to be earning significantly less than their French, German, Swiss, and UK counterparts, but approximately the same as those in Southern Europe. Only the CEOs of the Scandinavian listed companies earned less than those in Belgium. The median salaries (fixed + bonus + long-term remuneration) for the Bel 20, Bel Mid, and Bel Small companies all decreased over the past year. In 2018, the median salaries were EUR 1,875,000 in the Bel 20, EUR 690,000 in the Bel Mid, and EUR 465,000 in the Bel Small.

Xavier Baeten, Professor in Reward & Sustainability: “Nevertheless, this does not have to be an argument for raising salaries. We have found that the better-performing companies pay their CEOs relatively lower salaries. We also found a positive link between the level of the CEOs’ salaries and the fragmentation of the shareholdership, which reflects the CEOs’ dominant positions relative to the shareholders.”

An important innovation in the Belgian Corporate Governance Code is that the board of directors must determine a minimum amount that the senior executives must hold continuously in the form of shares. This practice is by no means widespread in Belgium; only 6% of companies require it today. It is much more common in the Netherlands (36%), France (49%), and the United Kingdom (96%).”

It is noteworthy that companies usually determine this amount in accordance with the fixed salary. As a rule, a CEO should hold an equivalent of twice their annual salary in the form of shares.

Finally, this survey looked specifically at the relationships between the boards’ compositions and their CEOs’ remunerations. First of all, it revealed that 36% of the directors in Belgium are female, and that the directors’ average age is 59. Furthermore, CEOs received higher remunerations in companies where more nationalities are represented on the board, and also where the directors have more extensive networks. Surprisingly, employee representation on the boards had no impact on the CEOs’ remuneration levels.

About the Executive Remuneration survey
Every year, Vlerick Business School’s Research Team analyses the remuneration reports from listed companies. From this year onwards, the survey is focusing on the companies that are part of the STOXX Europe 600 index and includes all the listed companies of Belgium and the Netherlands. The survey covers the following countries: Belgium, the Netherlands, France, Germany, the United Kingdom, Switzerland, Sweden, Norway, Denmark, Finland, Spain, Italy, Portugal, the Czech Republic and Austria. It analyses almost all remuneration characteristics, including remuneration levels, remuneration instruments, the underlying criteria, the shareholders’ voting behaviour, and the companies’ disclosure practices. The reported results relate to 2018. 

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