DCSIMG
Mercer

2011/2012 Asia Executive Remuneration Snapshot Survey

Asia has experienced a strong recovery from the Global Financial Crisis with impressive growth across the majority of economies and record company profits. This impetus continued into 2011 for some markets but has slowed for more mature markets.

 

The growing strength of Asian economies compared with their Western counterparts has also been reflected in executive remuneration. Last year, average executive salaries in Asia surpassed those in Europe for the first time. And they are on track to overtake those in the U.S, possibly by 2013. Along with rapid growth, leadership shortages and high inflation have also helped boost executive pay in Asia, especially in China, India, Indonesia, Vietnam, the Philippines and Malaysia.

 

To gain a thorough understanding of executive remuneration trends in Asia and their implications, Mercer had launched the third annual Asia Executive Remuneration Snapshot Survey late last year. A total of 201 companies took part in the survey from across Asia. Of them, 59% were firms with Asian headquarters and 41% had headquarters in the West. Publicly-traded organizations made up 57% of respondents with 43% privately held. The average annual revenue of participating companies was US$840 million and the average headcount stood at 1,900 employees.

 

The economic fortunes of the region are still linked to the West, and the government debt worries within the Eurozone have been a constant cloud on the horizon. They have dented the growth prospects of major economies including China, Japan and Singapore.While a healthy 60% of companies expect profits to rise in 2011, this figure stood at 72% when companies were last surveyed , highlighting the growing pessimism across the region.

 

Understandably, Japan is the most pessimistic. A total of 37% of companies expect a decrease in profits for 2011 compared to 22% in 2010. This is the highest figure within Asia Pacific, for a country which has stagnated for many years, seen pressure on its exports and suffered a catastrophic earthquake in 2011. But the tiger economies of Vietnam and the Philippines stand alone as the only two countries surveyed that have seen an increase in the number of companies expecting a rise in profits for 2011.

 

The note of caution across the region is evident in the results for companies discussing pay increases for their organization heads. All the 12 countries and markets surveyed expect to give lower pay increases for 2012 than they have given this year.

 

Asian companies are providing more aggressive incentive payments — both short-term incentives (STIs) and long-term incentives (LTIs) — than Western companies based in the region. For example, STIs make up 34% of the average Asian company head's remuneration package compared to 25% for a Western company.

 

CONTACTS

REGIONAL
Dr. Hans Kothuis
E-mail

AUSTRALIA
Tim Nice
E-mail

CHINA
Wei Zheng
E-mail

HONG KONG
John Le
E-mail

INDIA
Shanthi Naresh
E-mail

JAPAN
Masato Shirai
E-mail

Koji Kimura
E-mail

SOUTH KOREA
Hoonsang Yoon
E-mail

SOUTHEAST ASIA
Lee Shiau Fei
E-mail

Shai Ganu
E-mail

 


Full survey report is available at USD 1500.

Market survey reports for India, Singapore and Malaysia are also available at USD 500 each.

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