Economic slowdown curbs manager salaries

The slowdown in the economy resulted in manager salaries growing more slowly in 2008. As compared to 2007 these salaries will have increased by just 4% by the end of 2008. Last year the growth had been 4.9%. Currently German managers earn on average 280.000 Euros a year. Manager-associates receive 271,000 Euros while employed ones are remunerated with 283,000 Euros. These are the findings of a study on salaries called „Managers 2008“ which was carried out by the Kienbaum management consulting firm which interviewed managers from almost 500 companies.

Another finding of the study is that the variable component of manager salaries increased to on average 35% of total manager income. As a result many managers were able to increase their total amount of salaries even more. “The good economic development over the past twelve months resulted in higher company profits and therefore higher manager salaries. More and more companies prefer variable salary components so that manager salaries develop at the same pace as the business itself”, said Mr. Christian Näser who is an expert on salaries with Kienbaum.

The amount of royalties paid varies quite a lot: in small companies with up to 50 employees royalties amount to 43,000 Euros a year and about one quarter of total income of managers. In companies employing more than 5,000 people top managers receive 261,000 Euros which is about fifty percent of the annual salaries of such managers.

The profit situation of a company influences variable salary components to a large extent. Thus, the salary difference between successful and less successful top managers may amount to several hundred thousands of Euros. In companies employing more than 5,000 people a managing director is paid on average 162,000 Euros a year (39% of total income) in times of below-average profits whereas a manager receives 540,000 Euros (71% of total income), if the company is very profitable.

In general, annual income of German top managers varies quite a lot: it ranges from less than 60,000 Euros to more than 2.7 million Euros. One third of managing directors earn up to 180,000 Euros, another third is paid between 180,000 and 270,000 Euros. In 2008 11% of top managers will have earned more than 500,000 Euros. GERMAN