UK senior and middle managers have seen a fall in the proportion of earnings they receive in the form of bonus and profit share in 2010.
The Global 50 Remuneration Planning Report which shows consultancy Towers Watson’s analysis of differing patterns of ‘at risk’ pay, found that the remuneration of senior and middle managers has fallen far more over the past two years than that of lower level employees.
The research found senior managers in 2010 were earning on average 35% of base pay in bonuses and profit share compared to 45% in 2008.
The proportion of bonuses and profit share were lower for middle managers than for their senior counterparts, however, they also saw a decrease as the average percentage of base pay in bonuses and profit share was 13%, down from 16% two years ago.
The research also found a lack of consistency across Europe in terms of what senior managers were paid in relation to lower level employees.
For example, in Switzerland, senior managers received an average of 48% of base pay in bonuses and profit share, while more junior colleagues received 7%.
However in Denmark, senior managers earned an average of 25%, one of the lowest in Europe, middle managers 12% and lower level employees 8%, which is about average for that level.
Anne Severeyns, head of operations – data services, EMEA at Towers Watson said: “Bonuses and profit share are an important part of the overall reward package in most European countries.
“However, there are marked differences in the size of ‘at risk’ pay compared with base pay among countries as well as differences in the weight given to ‘at risk’ pay at difference job levels.
“Variable pay such as this, vitally, offers employers the ability to manage cost and performance as well as rewarding and retaining key talent.
“In the current economic environment it has never been more important to have tools at hand to work out remuneration in the context of strict budgets and at the same time using it to develop those employees who are vital to business success.”
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