Top executives of German companies listed on the DAX, MDAX, and SDAX received an average of €469,000 more in salary in 2021, according to a recent study by Ernst & Young (EY). The average annual salary for these executives is €2.4 million, while the average total compensation for CEOs rose by 23% to €3.3 million. Notably, female top managers earned significantly more than their male counterparts, with an average salary increase of 17% to around €2.4 million, compared to a 25% increase for men. However, men’s total compensation was €348,000 lower than that of female top managers.
The significant difference in total direct compensation is due to the strong negotiating position of women in Germany, according to Dr. Jens Massmann, partner and specialist in executive compensation at EY. Companies have been trying to attract more women to top positions for years, but there are few suitable female candidates for the highest leadership positions, which allows them to demand high salaries. While the proportion of women in executive committees is growing slowly, at least women are leading in compensation. Highly qualified female top managers continue to have a very strong negotiating position.
EY finds it difficult to predict further salary developments due to the ongoing Ukraine conflict, the Covid-19 pandemic, and high inflation, which are affecting many companies. However, a decrease in total direct compensation is possible, according to Massmann. The trend is no longer as clear as it was last year, and the compensation landscape is becoming more diverse. Therefore, a decline in variable compensation and total direct compensation for the current year is possible.
