Top Executive Compensation Survey

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EuropeanEuropeanTop ExecutiveTop Executive

Compensation SurveyCompensation Survey

Presentation - WECBF MeetingPresentation - WECBF MeetingDublin March 22, 2007Dublin March 22, 2007

2 European Top Executive Compensation SurveyEuropean Top Executive Compensation Survey

AboutAbout

• Created by Michel de Tymowski in 1999

• MDT credentials

• Specializes in Reward Management

• Work with a network of independent consultants

• Started sponsored survey business in 2003 2003 - Company Car Survey - HQs positions

2004 - 2005 Compensation & Benefit Survey - Nigeria

2005 - 2006 European Top Executive Compensation (TEC) Survey

• Major clients :Amadeus Bunge Compaq Getronics Hewlett Packard IATAJTI Medtronic Orange Philip Morris RJ Reynolds SeronoSGS Tag Aviation Temenos WEF


Current IssuesCurrent Issues

Were you ever confronted with issues such as having to assess the competitive pay level of your international executives with multi-country, regional or even worldwide responsibilities?

Where such information can be found?

In Europe such data tends to be highly confidential and very difficult to access.

Many organizations, to address this problem, extrapolate executive data from US annual reports. Does it make sense? It is one source, but how reliable when exchange rates have been so volatile these past couple of years. And the US are not Europe!

Some countries appear better covered survey wise on competitive remuneration, while others have no information at all requiring a lot of imagination and/or educated guess from compensation gurus to establish estimated salary levels.


Current IssuesCurrent Issues

Today's competitive Executive Compensation is no more limited to a specific country remuneration where a headquarter is established.

We are competing within a global market in which Europe is one of the key players.

When it comes to Executive Compensation, Corporations need to be aware of how much an executive should be paid in Europe, not only in the country where he or she is paid from.

This is the backbone of the TEC survey.

No other surveys on the market will bring you such global coverage and flexibility within one product!


Competitive Market SurveysCompetitive Market Surveys

Some big players out there Towers Perrin

INSitE Country HQs survey

Hay PayNet

Mercer iMercer

Watson Wyatt Compensation report - CompTrack

Hewitt Country HQs survey

• Major European Clubs : Consumer Group WECBF Mercer High Tech Group HP European Mgmt Survey Western Management Pharma Group EPEX Hewitt Finance Sector In Bank Towers Perrin


A new Compensation Survey concept developed by professionals having solid C&B Corporate and Consulting experiences

It addresses exclusively Senior European Executive Management compensation packages

Because of its distinctive design, it is a reliable source of information for Corporations to assess :

its senior management compensation levels

specific/hybrid executive positions usually not covered by conventional surveys or that are hard to match.

The SurveyThe Survey


TEC Background TEC Background

TEC concept developed in 2003 and 2004

Survey initially developed for Compaq senior executive group

Job matching system derives from the COMPASS computer aided job evaluation system

initially designed and developed at Mercer by MDT

Light version adopted by the FCG Forum group in 1994,1995 & 1996

Used for HQs surveys in Switzerland and local surveys in East Europe

COMPASS went into further development to become NETCOMP in 1999

NETCOMP job evaluation system fully integrated into the TEC program

• TEC launched in 2005 with the support of Philip Morris and Hewlett Packard


Why TEC ?Why TEC ?

The survey focuses on senior executive positions throughout Europe with international responsibilities

It is built around a user friendly database application enabling you to model various scenarios

It focuses specifically on individual remuneration data

There is no extensive policy questionnaire to be completed

It has a "Cafeteria approach“

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Why TEC ?Why TEC ?

The report is run and customized by the participant

It is a dynamic database (updated on a bi-annual basis)

Positions can be mixed (and compared) across Europe as we provide a Country Salary Coefficient (CSC) factor in the TEC application

Unique positions (usually not covered in any surveys) can be simulated through the application using the TEC built-in position evaluation module

European Top Executive Compensation SurveyEuropean Top Executive Compensation Survey

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Our Competitive EdgeOur Competitive Edge


We have a long experience in surveys, either as users (Watson Wyatt, Hewitt, Towers Perrin, Hay, Mercer, and Western Management surveys) or as previous consultant with Towers Perrin, Mercer and MCS.

As a result, we better understand what the customer is looking for!

We believe that the TEC survey and the way it is designed will fill a gap that currently exists today in European Executive Compensation.

Due to the way we are structured, the overall TEC design and process are performed by experienced and dedicated compensation consultants.

No work is, or will be, delegated to junior staff. This ensures the utmost quality of the output

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Survey DesignSurvey Design


Some of the features of this survey are quite unique and are structured as follows:

15 top benchmark positions within six regional/divisional levels for a reported entity (up to a total of 81 positions throughout Europe, from Corporate down to Area levels)

Cash compensation is the main driver

Data security is ensured through a multi password process

In addition survey results on the website cannot be read without the initial application which resides at the participant's site location

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Beside the job code to identify the position to be reported, each job is individually assessed through a position evaluation process which is integrated into the TEC program survey

As the survey covers positions within multiple countries, the Country Salary Coefficient (with preset values that can be modified by the participant) will be provided for each country to enable cross-European job analysis



Some of the features of this survey are quite unique and are structured as follows (continued) :

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One of the unique features of the TEC survey is the possibility for the participants to make their own customized reports

• comparing any executive jobs in their organization with the surveyed positions (by combining one or more positions)

• the option to select specific industry sectors• the companies reported data by geography (within one country, or multi-countries)• the revenue dimension• the evaluation score

Position(s) Head of BU Finance

Pharma/Chemical

F, UK, G, CH

Euro 1 – 3 bio

ParticipantSelection

Head of BU Finance &Head of Regional Finance

All

Germany

Below Euro 1 billion

Sector(s)

Geography

Dimension

Position ReportOutput

Head of Corporate Legal &Head of Regulatory Affairs

Consumer Goods &Fast Moving CG

All

All

Head of Regional R&D &Head of Regional Engineering

Industrial Goods &Consumer Goods

Germany & France

Euro 3 - 5 bio

Position ReportOutput 1




Evaluation score < 400 pts > 200 pts & < 400 pts All > 500 pts

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• With the country selection, you can define the different pay values of executives in any of the countries covered by the survey. This can also be used for evaluating expatriate transfer salaries.

• Another key feature, is the possibility to assess the value of any executive profiles by using the job matching program built-in the TEC program

• It will deliver a point value for any jobs you will enter into the system (whether or not the position is listed in the survey)

• The program gives you the opportunity to store in the program your own specific positions

• For Hay user, a point equivalence chart can be provided

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This point value results from the job matching process which is part of the database questionnaire.

It is structured around a multiple choice questionnaire

The evaluation table is built around six main factors and is the heart of the survey.

A. Qualification C. Organizational Resources E. LeadershipB. Communication D. Organizational Effectiveness F. Challenge

Each factor has a number of corresponding sub-factors with multiple choice questions to be entered.

The position evaluation questionnaire can be printed or directly accessed on the application as the questionnaire is built-in the program.

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Survey ImprovementsSurvey Improvements


The survey program has a a built-in job matching process.

Following a strong request coming from a non negligible number of participants (as well as our sponsors), we have updated in 2006 our current program to include a link to existing well known evaluation systems.

As of the 2006 software version, participants using HAY, Mercer or Watson Wyatt evaluation systems can now bypass the TEC job matching process by reporting directly their point scores which is a great time saving process!

In addition, not only inputs but also output results can show the point system of their choice.

Companies having no job evaluation system in place (and doing the full job analysis of the TEC survey) produce not only TEC points, but also, if desired, HAY, Mercer or Watson Wyatt points.

Word of caution : it is not the intention of the TEC survey to replace competitive well recognized job evaluation systems, but just to correlate the results

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Survey TimingSurvey Timing


This is a dynamic database that is updated on a bi-annual basis (April - October)

• to accommodate varied focal point review timelines• new companies joining the survey at a later stage.

• You can take a drawdown at any time that suits you.

• The good news is that you are requested to complete the survey only once in the calendar year.

• One month after the submission time, the list of participating companies will be updated on the website in order for the participants to decide whether or not they want to download the latest updated version.

• Update will be required once executive merit increase process (focal point review) is implemented

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Surveyed PositionsSurveyed Positions



Input ScreenInput Screen


Query ScreenQuery Screen

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Output ScreenOutput Screen


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TEC Participation TEC Participation

• TEC participants list 2005/2006

Alcatel

British Petroleum

Brocade

Bünge

Cargill

ebay

Edwards Lifesciences

Hewlett Packard

Hilti

Ingram Micro

Johnson & Johnson

Kraft Europe

Masterfoods Europe

Nokia

Novartis Consumer Health

Novelis

Orange

Philip Morris Int'l

Serono

SGS

SICPA

SITA

Swiss Re

Temenos

Tetra pak

TNT

Missed the deadline

Barclay’s Bank MicrosoftGetronics Procter & GambleMedtronic


TEC Participation FeesTEC Participation Fees

First time participant entry fees for 2007 is € 1’475.-

Continuing participants pay a flat annual fee of € 1’000.-

Fees are paid at registration

Once data provided, participant gets immediate access to the existing database

An additional 7.6% of VAT will be charged on the above fees for companies invoiced in Switzerland

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Transcript of Top Executive Compensation Survey