How much do corporate super bosses get paid? In the top of the Stock Exchange 1.5 million on average in 2022 – Corriere.it

The check cashed in 2022 by the managing directors of the 40 listed companies that make up the Ftse Mib index, the most representative of Piazza Affari, amounts to 57 million euros gross. In the same year, the gross profit generated by these companies reached 98 billion euros and the total capitalization to 539 billion. Inflation, which soared to around 10% before declining in recent months, has had no impact on the payrolls of the CEOs, as institutional investors have long been asking for, who have always focused on a package with a more contained “fixed” part and generosity on the “variable” with bonuses and incentive plans. Corporate Italy, i.e. the system of large companies, is adapting: the fixed component has dropped to 31% (from 33%) while the variable component linked to the achievement of medium-term objectives has risen decisively (to 46% from 42%) -long term.

Room for increases

“The first consideration

is that, compared to these numbers and in particular to the profits produced, Italian CEOs are paid less than in other countries. There is still room for greater recognition on the payment of bonuses», says Marco Valerio Morelli, managing director of Mercer Italia, the company of the Marsh McLennan group which offers professional services to companies and which presents the results of the research at L’Economia ( eleventh edition) on the remuneration of CEOs and board members. There are two clear trends that emerge from the numbers analysed: first of all, the so-called pay-for-performance approach. The Ftse Mib companies increased their gross profit results by 59%, with peaks of 70% in the energy sector (driven by high bills) but also in manufacturing and non-financial services (96%) as well as banks and insurance (40%). Last year, 68% of managing directors did better and more than the objective sheet assigned, i.e. their targets. Hence the “little treasure” of 57 million paid to company heads, the highest ever disbursed in the last ten years. Up to here, everything is according to tradition and the old mantra of “cash is king” who wants the compensation system linked to the production of profits and profits. However, for some years the scenario has been evolving rapidly. «For companies, sustainability has become the norm. ESG issues have entered the remuneration policies, which are declined according to different KPIs, i.e. the performance indicators in the incentive systems, overturning the paradigm that wanted the latter to be based only on financial criteria. Today the head of the company is measured starting from the reduction of CO2 emissions into the atmosphere, from the degree of diversity and inclusion, from customer satisfaction» says Morelli. Practically all the listed companies of the Ftse Mib (95%) have introduced at least one indicator in their incentive systems, whether short or long-term. But which? The scene is dominated by the themes of the environment, safety and gender inclusion. For example, the presence of women on boards of directors is still increasing, reaching 40% (from 38% in 2021). A good news? Certainly, but only in part according to the Mercer experts who also analyze what happens under the board of directors.

Pink odds

And here the numbers are different: the share of women who hold executive or top management roles first reporting to the CEO moves from 15 to 19%. In short, if the effect of the law on women’s quotas has produced innovations, today this does not appear sufficient. «We need to do more», says Morelli, «in particular, leaders must have courage and take risks: today women are few but they work well. The leadership model must evolve at a cultural level. Then, of course, the country must do its part with support services for parents and in particular for motherhood”. Instead, the listed sector is still far from resolving the gender pay gap: there is a lack of assessment analyses, studies and evaluations that produce any concrete proposals. The hope of the experts is, for the future, that the indicators on gender pay will also be included, with the aim of reducing the disparities in the payroll between men and women who carry out the same job to the minimum possible. More generally, observe in Mercer, ESG indicators are consolidating within companies. For example, in the financial sector there are issues of green bonds for green projects, but there is also an increase in loans for companies in the circular economy or the energy transition. The frequency of use and the type of indicators have stabilized to such an extent that they have almost reached a plateau on current metrics which makes further growth difficult. Inside Mercer they are convinced that a step forward is needed for the future and they are launching a sort of call-to-action to companies on how to evolve these key indicators of sustainability. Perhaps with a work of greater connection between the various internal board committees dedicated to specific aspects. In short, greater integration is needed.