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Jakarta, Indonesia - In 2015, executive-level basic salaries at top multinational companies are projected to rise by 3.1% from 2014 levels. Short-term bonuses are expected to increase by 4.2% and cash compensation to 1.4 million euros, a 3.5% increase compared to last year. However, growth is slowing compared to the last 5 years. These figures are presented by executive search firm Pedersen & Partners, which released a survey on Thursday (01/08/2015).

Pedersen & Partners conducted a survey of 1,700 executives in 330 companies located in 17 countries. The corporations surveyed employ an average workforce of 133 thousand employees, with average turnover of 42 billion euros and profit of 4.1 billion euros.

Conrad Pramboeck, Head of Compensation Consulting at Pedersen & Partners, said that the tendency is for growth in executive compensation to slow down this year. "The basic salary increased by an average of 4-6% in the last 5 years, but this year the rate of increase dropped below 3%. In addition, the amount of total compensation, including short-term bonuses, increased by an average of nearly 7% over the last 5 years, but this year only increased by 3.5%," added Pramboeck.

The salaries of white-collar employees in Western Europe and the United States rose by 3-4% on average. This reflects the increase in executive pay, including those working in large companies, almost equal to the increase in salary levels of managers and ordinary employees.

Pedersen & Partners used weighting in the compensation survey to measure the increase in salaries and cash compensation. Generally, the larger the company, the higher the compensation for top executives, reflecting the higher level of responsibility. "To put it simply, the average compensation for upper-class executives increased by 600,000 euros for every 50,000 employees they lead," said Pramboeck.

Executive performance is also crucial for assessing compensation. Executives must meet increasing company targets in order to qualify for a bonus. With this taken into consideration, an executive may receive a lower bonus if the company’s earnings before interest and taxes (EBIT) fell compared with last year, despite making an overall profit.

Western European and US companies offer their executives equivalent compensation packages in terms of base compensation and bonuses. The average value of cash compensation, including short-term bonuses, is 1.4-1.5 million euros. The biggest difference in compensation structure is seen in long-term incentives, which mostly take the form of stock options.

The average US company provided stock options worth 447,000 euros to its top executives, while managers in European companies received stock options worth 107,000 euros on average.

Executive salaries in developing countries rose more rapidly than in developed countries. Generally, the highest salaries were paid by companies in the United States and Western Europe. "Executive compensation in emerging markets – such as China, India and South Africa – is lower than Western countries. However, their salaries are rising faster than in Western Europe and the United States," said Pramboeck.

Compensation in developing countries grew by an average of 7-10%, compared to 4-5% in Western countries. "The perception of Asia-Pacific as a cheap labor market is somewhat true, but only for non-executive workers," said Gary Williams, Managing Director of Southeast Asia at Pedersen & Partners.

"Meanwhile, executives at multinational companies who can show slick performance and positive results will receive a compensation package that equals or even exceeds the amount obtained by Western expatriates working in Asia-Pacific," Williams added.