A recent report from the seventh edition of the study on executive compensation reveals that Ibex committee managers saw their total pay decline by 23 percent in 2022. In a scenario of a stable market, the decrease stands at 10 percent compared with the previous year. The figures come from Remuneration of Executives of Listed Companies, published this Monday by KPMG Abogados. The fall in pay largely stems from lower stock-based compensation and reduced contributions to retirement or savings plans. The authors base their conclusions on compensation reports submitted by companies to the National Securities Market Commission. In total, 34 Ibex-listed firms spanning sectors such as energy, construction, distribution, and tourism were analyzed. These companies vary widely in size, from under 50 to more than 2,000 employees, and report revenues ranging from just under 100 million euros to more than 5,000 million euros. [Citation: KPMG Abogados compensation study, 2023 edition]
The report notes that a smaller portion of long-term incentive charges were settled in 2022. The TSR indicator used to gauge executive performance is tied to stock-market performance and was influenced by factors such as Russia’s invasion of Ukraine and the inflationary environment of the year. Monica San Nicolás, head of the Human Services area for General Directors and Managers Remuneration at KPMG, commented on these trends in an interview with active people, emphasizing how market conditions shape executive awards. [Citation: KPMG interview with Monica San Nicolás]
Additionally, the study identifies an overall drop in total compensation for board members, alongside a modest rise in permanent fixed wages due to annual salary increases. A slight contraction is observed in Ibex 35 variable pay. This shift reflects a reduction in 2022 variable charges across both Ibex 35 and the continuous market, with the continuous-market dynamic exerting a notable influence on chief executives and managing directors across the Ibex. [Citation: KPMG analysis]
Another pattern highlighted by the report is the relative stability in the number of directors within listed corporations. San Nicolás explains that most Ibex 35 boards are composed of 12 members, while in the fixed, ongoing market the standard is nine. In contrast, the Ibex 35 financial sector frequently exceeds the 12-director mark, a situation described as logical given the sector’s inherent complexity. [Citation: KPMG commentary]
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The study addresses issues around external advice and the level of transparency in compensation design. It questions the identity and involvement of consultants used for compensation schemes and whether the boards have complied with CNMV recommendations. The analysis also reveals that the gender gap on boards widened for the second consecutive year, despite European directives aimed at promoting equality and remuneration transparency among listed companies. In the Ibex 35 sample, only 11 companies (32 percent) meet the female representation targets established by regulations. In the continuous market, just 14 groups (16 percent) are current on gender issues. [Citation: CNMV guidelines replication]
Regarding the wage gap between men and women that broadened again in 2022, San Nicolás notes that discrepancies arise from differences in roles and profiles held by women and men within organizations. Experience levels and the later inclusion of women in senior management are cited as contributing factors, helping to explain persistent gaps in pay and representation. [Citation: San Nicolás interview insights]