Box strategies to inflate executive pay

For the moment, everything is fine: corporate envelopes dedicated to wage increases should continue to grow in 2020, from 2.1%, according to Deloitte, to 2.4%, according to Mercer, or 2.5%, according to Aon. Levels close to those of 2019. But “time is more than ever to individualization, says Bruno Rocquemont, director of talent management department of Mercer.Only 16% of companies have granted increases to all their employees. last year and the most sought-after profiles (computer scientist, digital skills …) are doing well. “

Confirmation of Khalil Aït-Mouloud, head of Gras Savoye Willis Towers Watson's quest and compensation department: “The rises will be higher than 3% in the sectors in tension (finances, technologies …) and between 1.5 and 2% in the In addition, companies that had grown less than average employees last year want to make more effort in a context of war talent “For Coralie Rachet, CEO of Robert Walters, the state of the market for executives is a valuable ally to negotiate. “Some groups even offer welcome bonuses, mobility aids or unlimited holiday arrangements.”

Our exclusive indicator of the average remuneration of executives (fixed + variable) of the private sector was revised upward in 2019: the increase expected a year ago (+ 2.5%), confirming the recovery of 2018, s' is more than achieved, with + 2.8%. For 2020, Efistat expects a + 2.7% consolidation (Source: Estimates and forecasts Argus Salaries / Challenges).

Candidates with rare skills are not the only ones to benefit from the largesse of employers. For François Auger, director of compensation and performance of Aon, “the main winners are the strong contributors who exceed their objectives, the high potentials or those who occupy key functions, with an increase granted to the first”. According to him, their salary jumped 6.5% in 2019, against 4.2% in 2018, when the average employee had to settle for a modest 2.3%. “The differential is constantly widening.”

Variable for all

This individualisation based on profiles and results also encourages human resources departments to rely on the variable portion of compensation to reward the most deserving employees. The company SAS, publisher of data analysis software, has generalized this year the introduction of bonuses to all its employees according to their results. “A way to keep up with the market, Yannick Charron, HRD justified, and where we previously acted discretionarily, we contractually agreed with our employees to supplement their base salary with a bonus of 8 to 25 % of this salary. ” In addition to financial objectives, this is based on the achievement of individual objectives, but also on those of the team.

This formula makes many followers. “We base the amount of the variable component on five items, which can represent up to 20% of the overall salary,” says Eric Beaudouin, General Manager of Oasys Consultants, a human resources consulting firm. performance of the group, that of the entity, the commercial contribution to other entities, the individual production and the production of articles, books and conferences. ” Even salespeople are seduced by this new collective spirit. “Today, the BtoB bill of sale is no longer just the result of a person, but the fruit of teamwork that expands into the marketing function and can involve the legal departments, financial markets, and very often production, “explains Jean Muller, JCDecaux Group's Chief Commercial and Sales Manager, which explains why variable compensation for salespeople is no longer only linked to individual results, but also to collective performance.”

More transparency

“To respond to the feeling of injustice, companies simplify and formalize their remuneration policy,” said Frédéric Bonneton, a partner in the law firm MCR, a specialist in compensation. The software editor Yousign decided a year ago to formalize its salary grid according to several criteria (location, seniority in the company, position, level of responsibility, level of expertise …), so that each employee can position himself and understand how his remuneration is established. “We ask them to do the exercise before passing their evaluation interview, says Antoine Louiset, a co-founder of Yousign, and the errors of appreciation are very rare!” Guillaume Robin, CEO of Thermador, a heating accessories distribution group listed on Euronext, which employs 570 people, chose another path: “We publish each year, at the level of each of our subsidiaries, in a personal way, the fixed monthly salary and the annual total remuneration, including variable part. “

In addition to fixed and variable salaries, employers put forward all the tools at their disposal to reward their employees without putting too much burden on the company's costs: employee savings plans are boosted by the good performance of the company as well than new legal obligations and tax incentives. In particular, the Pact Act made mandatory participation in companies with more than 50 employees and encouraged smaller organizations to take this route.

The 20% flat rate has been eliminated for the profit-sharing of companies with 50 to 250 employees and for the profit-sharing and participation of companies with less than 50 employees. Employee share ownership is also making a comeback. The real estate group Kaufman & Broad recently adopted it. “We have just launched a shareholding offer reserved for employees that guarantees their capital and a remuneration that reaches at least 5% per year,” explains Nordine Hachemi, its managing director.

The issue of retirement

As for the preservation of retirement, it is, in view of the changes to come, in all minds. “In the context of declining retirement age and declining pensions, the next reform should encourage companies to step up their policies in this area,” predicts Benjamin Sanson, a retirement savings consultant at Mercer. to become crucial for executives who earn more than 120,000 euros in annual income and who may not be able to contribute more than this amount. “

For employees benefiting from supplementary retirement benefits, the big bang is already in progress: without much change for articles 83 (collective agreement subscribed by the company for its employees) with the exception of voluntary payments recoverable in capital. On the other hand, it provides for substantial changes regarding hat retreats. “These will be transferable if the employee leaves the company before retirement, said Alain Boyadjian, retired director at Aon, but the amount will be capped at 3% of the payroll each year and can not exceed 30% of that beyond ten years. “

Companies also put the quality of life at work on the table. With, for example, “support proposals such as online medical consultation or new devices for carers”, describes Jean-Marc Esvant, director of the front office and social protection of Verlingue, an insurance broker for companies. What to be more in line with the concerns of employees.

Publication of wage gaps will create emotion

Mandatory from March 2020 for companies with more than 50 employees, the publication of an index on gender equality has lifted the veil on a hitherto taboo subject: wage gaps. The theme continues to grow, particularly in the Pact Act. As of January 1, 2020, listed companies will have to publish the difference between the salary of executives and the average and median salary of the company. In 2017, according to the consulting firm Proxinvest investors, the average remuneration of CEO CAC 40 exceeded 5 million euros, more than 240 times the Smic, up 14% over 2016. And for the CEOs of the SBF 120, the average compensation still reaches 3.8 million. The salaries of the big bosses have thus increased twice as fast as the average salary of their employees over the last five years. Even if France is at the bottom of the European pack and 1000 leagues of compensation in the United States and the United Kingdom, for Alexandre Johnson, former Comp & Ben de Carrefour who has just joined the firm MCR to develop a service of help to mid-cap companies on these issues of remuneration, “the publication of the differences risks creating emotions and the companies will have to show pedagogy in order to better explain to their employees their policy”.


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