Non executives directors in europe 2014

Non-executive directors in Europe

2014

Painting a picture of pay practices, structures and diversity of leading European companies.

This review provides a detailed snapshot of the background, experiences and pay of the individuals responsible for the governance of Europe’s companies.

December 2014

1

Typical European Board

Contents

How the directors are paid

Typical European Board

1

Welcome

2

European overview

4

Remuneration

5

Board structure

9

Independence

11

How the directors are organised

Multi-chair responsibility

13

Average number of directors

10

Diversity

14

Number of board committees

3

Country analysis – Europe

21

Prevalence of audit committee

100%

Austria

22

Prevalence of remuneration committee

97%

Belgium

24

Prevalence of nomination committee

73%

Finland

26

Prevalence of risk committee

22%

France

28

Germany

30

Italy

Non-executive chair fee

€249,600

Non-executive director fee

€64,800

Non-executive chair actual pay

€265,000

Non-executive director actual pay

€81,800

Comparison chair fee vs. director’s fee

2.76

Number of board meetings

8

Number of audit committee meetings

5

Number of remuneration committee meetings

5

32

Number of nomination committee meetings

4

Netherlands

34

Prevalence of risk committee meetings

6

Norway

36

Spain

38

Who the directors are

Sweden

40

Company-declared independent directors

78%

Switzerland

42

Board where all non-executive directors are declared independent

17%

UK

44

Nationality – same country

64%

Perspective: Non-executive director fees in the United States

46

Nationality – within the EU

12%

Nationality – non-EU

24%

Methodology

48

International experience – same country

55%

Sample

51

International experience – within the EU

23%

International experience – non-EU

22%

Male

77%

Female

23%

Contact us

Gender pay gap

9%

Audit committees without female members

34%

For more information or to discuss this report further, please contact your local Hay Group consultant or email: execrewardeurope@haygroup.com

Remuneration committees without female members

40%

Median average board age

60

2

3

Non–executive directors in Europe

Welcome Welcome to Hay Group’s study of non-executive directors in Europe 2014.

In a year of relative quiet on the executive compensation front, boards have ensured that their own fee increases also keep a low profile so the interesting developments are more to be found in the structures and compositions of boards and in the evolving roles of committees.

Fee levels for non-executive directors appointed by the Annual General Meetings of companies did at the median not move in ten of the 12 countries1 we surveyed. Norway and Sweden were the only countries to see a movement in fee policies. This is in line with the 1.7 per cent salary movement of executives2 seen across the continent. Although the median increase for policy levels of fees was zero, the market median level of actual fees paid to non-executive chairs of boards moved to €265,000 (up from €249,000 last year) and the median fee for other non-executive directors was €81,800 (a downward movement from €86,000 last year). The mixed picture mainly reflects that not all companies stood still, there were changes to board compositions and there have been a few changes to index constituents too.

Pay structures have also been changing but not in a uniform way. Some countries, like Germany, continue to see a significant share of companies use variable compensation for non-executive directors, which stands in sharp contrast to practices in countries like the United Kingdom (although a number of German companies have recently moved more towards fixed fee practices). Fees delivered in shares are popular in countries like Switzerland and Finland but almost unheard of in other countries like Italy. And across the continent it is still relatively rare to see requirements for nonexecutive directors to build a significant shareholding in the company they oversee, but this has been a strong trend for executive compensation whose practices have been imported from the United States and since non-executive shareholding requirements are also common there we expect to see much more of this over the coming years.

Our study also highlights a number of interesting developments in the composition of boards.

Over the past years we have seen a clear change of scope around both risk and remuneration.

Many companies are separating risk out from audit committee and general board work to deal with increases in both complexity and regulation. Overall across our sample we saw the prevalence of risk committees go from 12 per cent last year to 22 per cent this year. With regard to remuneration, the scope of remuneration committees is changing as the committee work takes on more and more aspects of managing executive human resources, including succession and performance management. We now see about one third of remuneration committees in Europe have a scope beyond simply the pay and rations of executives. And within the reward remit the role of the committee is also changing. Increasingly across Europe remuneration committees and their chairs are engaged in consultations with key investors outside of the traditional investor rounds and the chair often has an official role at the annual general meeting, something that is very rare for other committees.

Not only the scope but also the composition of boards is changing. The march towards more diverse boards continues - the proportion of female directors increased across the sample from 21 per cent to 23 per cent over the year and some 38 per cent of new director appointments were women. At the same time the gender pay gap we have been reporting on in previous years fell marginally from 10 per cent to 9 percent as more women have been brought onto boards’ committees. The percentage of committees without women members fell during the year from 43 per cent to 34 per cent for audit committees and from 48 per cent to 40 per cent for remuneration committees.

Boards are also much more international. This year we saw the average percentage of local directors drop from 66 per cent to 64 per cent and the average percentage of directors with the majority of their career in the country where the company is headquartered dropped from 62 per cent to 55 per cent.

This year we also tested the hypothesis that European boards tend to be populated by the same set of directors. The findings from our limited sample, testing cross-memberships of large European corporations’ boards, generally disproves this with only 13 per cent of directors sitting on more than one board, and the vast majority of these individuals only being on two large European corporate boards - though it is notable that multiple appointments are most likely to be of French, German or Swedish nationalities.

We hope that you will find this report useful and enlightening and please do not hesitate to get in touch with your local Hay Group contact or either of the consultants listed in the individual country sections.

Carl Sjostrom Managing Director | Executive Reward Europe London, November 2014

1 Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland and the United Kingdom companies listed on the main stock exchange indices.

2 Hay Group’s Top Executive Compensation in Europe 2014 study. ©2014 Hay Group. All rights reserved

4

5

Non–executive directors in Europe

European overview Non-executive directors are appointed by shareholders as their supervisory, non-executive representatives on the ultimate board of a company. What makes for a more effective constellation of non-executive directors (we will call them ‘directors’ for the purposes of this report) is a matter of strong opinion and, as this report will show, practices across Europe have a lot of commonality but also some significant differences. Where we see clear similarities are in the recognised benefits of a diverse board and in having dedicated audit, remuneration and nominations committees. European boards have a median of ten directors and the vast majority of companies in our sample have separate audit and remuneration committees, with many also having a nominations committee, and increasingly also having a committee dedicated to considering risk. Each committee has director members selected from the population of the broader board.

This study also provides a commentary on director trends in the United States, which can be found at the end of the report.

Remuneration Director remuneration and fee policy varies widely across Europe. Board fees are typically fixed fees though some boards have variable pay components, usually in the form of meeting fees. The median basic policy fee paid to directors across Europe is €64,800, with fees for Austrian directors being the lowest at €15,000 and for Swiss directors the highest at €197,400.

Most companies across Europe pay their fees wholly in the form of cash but equity awards are made in some cases. Similar to last year’s report, eight per cent of companies in our sample part pay their directors in equity and this is particularly prevalent in countries such as Finland and Switzerland.

German director pay differs in that many German companies partly pay their directors in the form of variable cash (though this is becoming slightly less prevalent due to new restrictions imposed by the German government).

All companies in the survey have an audit committee, where the basic median committee fee is an additional €14,100 for director members and an additional €23,600 for the committee chair.

Some 97 per cent of companies have a committee which handles the remuneration of the board, where the median basic committee fee across Europe is an additional €11,600 for members and an additional €17,700 for the chair. In over a quarter of companies, the board non-executive chair also chairs the remuneration committee (down from over a third last year). This decrease shows that companies are becoming more wary of the issue of power concentration.

Policy fees Policy fee figures represent the rates of pay the company has stated it will pay directors for service on the main board and committees. In addition to these fees may be attendance fees and, in some countries, variable pay linked to company performance.

Our approach This study is designed to provide a comparison of board composition and remuneration for major companies across Europe. We looked at the constituent companies of the major indices for 12 European countries (a full list of these companies is provided at the back of the report).

The data we collected is from the most recently filed public documentation, primarily annual reports. The data covers non-executive directors elected by general meeting, thus excluding all executive management and employee representatives.

We have reported on both the policy pay and the actual pay information for each organisation.

Policy pay data represents the typical pay that each director expects to receive for service on the main board and committees, including meeting fees (per meeting) if applicable.

Actual pay data is the amount paid to each individual director as reported in the audited annual reports. This figure will be affected by factors such as the specific number of committees an individual sits on, how many meetings they attended and, if any form of variable pay is involved, and the performance of the company.

We have chosen to report most figures as median (rather than average) as this minimises the impact of extreme or unusual results and is more representative of the ‘true’ picture.

Throughout the report we also refer to the concept of ‘median average’. This refers to how we calculated the actual awards – we calculated an incumbent average for each company and then took the median of those averages.

All European values have been converted to Euros taking the average exchange rate for the year to 31 December 2013.

©2014 Hay Group. All rights reserved

Table 1: Median policy fees by country Median basic board Fees Country

Nonexecutive chair

Director

Austria

€ 30,000

Belgium

Median additional committee retainers Audit

RemCo

Risk

Average Other

Chairman

Member

Chair

Member

Chair

Member

Chair

Member

€ 15,000

€ 10,000

€ 5,000

€ 10,000

€ 5,000

-

-

€ 10,000

€ 5,000

€ 100,000

€ 35,000

€ 12,500

€ 6,100

€ 13,800

€ 6,300

-

-

€ 15,000

€ 10,000

Finland

€ 97,000

€ 46,900

€ 15,000

-

-

-

-

-

-

-

France

€ 225,200

€ 31,500

€ 20,000

€ 10,000

€ 14,300

€ 8,200

-

-

€ 10,000

€ 7,500

Germany

€ 198,800

€ 94,400

€ 75,000

€ 40,000

€ 40,000

€ 20,000

-

-

€ 40,000

€ 20,000

Italy

€ 400,000

€ 50,000

€ 26,400

€ 18,400

€ 20,000

€ 15,000

€ 30,000

€ 20,000

€ 15,000

€ 15,100

Netherlands

€ 80,000

€ 50,000

€ 12,800

€ 9,000

€ 10,000

€ 7,300

-

-

€ 10,000

€ 6,000

Norway

€ 64,100

€ 39,700

€ 19,700

€ 10,900

€ 12,400

€ 8,800

-

-

-

-

-

€ 85,000

€ 59,000

€ 39,000

€ 43,500

€ 29,000

-

-

-

-

Sweden

€ 182,600

€ 60,700

€ 20,500

€ 14,200

€ 12,700

€ 10,600

-

-

-

-

Switzerland

€ 887,000 € 197,400

€ 46,700

€ 24,400

€ 32,500

€ 24,400

-

-

€ 24,400

€ 24,400

UK

€ 429,900

€ 76,600

€ 23,600

€ 17,400

€ 23,600

€ 13,000

€ 35,300

€ 14,100

€ 11,800

€ 10,600

European median

€ 249,600 € 64,800

€ 23,600

€ 14,100

€ 17,700

€ 11,600

€ 32,700

€ 20,000

€ 15,000

€ 10,000

Spain

6

7

Non–executive directors in Europe

Year-on-year pay movements The median year-on-year movements in policies for chair fees was zero per cent in nine out of the 12 countries. Median upward movements occurred in Norway (three per cent increase) and Sweden (one per cent increase) and in Italy there was technically a one per cent decrease in fees. Norway and Sweden were also the only countries to experience change in policy for other director fees, having median increases of four per cent and three per cent respectively.

To arrive at a year-on-year movement, we have only considered companies whose data was captured both in last and this year’s study, with comparisons being calculated in the reported currency to remove the effect of any movements against the Euro. New companies to this year’s study, along with companies excluded for reasons such as a company falling out of the index are not included in the year-on-year summary.

Table 2: Median actual pay by country

Switzerland Germany Spain UK Italy

European median Belgium Netherlands Sweden

Non-executive chair total Median average director's total Median market cap (x100,000)

France Finland Norway

Actual pay Actual pay is the amount paid to each individual director, as reported in the audited annual report.

This figure will be affected by the number of committees an individual sits on, how many meetings they attended and, where variable pay is involved, the performance of the company.

Our figures for actual pay show the total fees paid to directors and non-executive chairs for services throughout the year (including fees for meetings attended). The number of board and committee meetings held over a year varies significantly between companies and between countries. The median fee earned by non-executive chairs across Europe was €265,000 during the year, up from €249,000 last year, with Swiss non-executive chairs continuing to earn the most at €760,100 and, just across the mountains, Austrian non-executive chairs earning the least at €57,100. The median fees received by other non-executive directors across Europe was €81,800 down from €86,000 last year, with Swiss directors continuing to earn the most at €230,600 and Austrian directors earning the least at €29,900. Pay movement for non-chair directors is down this year due to member changes within companies’ boards and among index constituents. There is also a slight impact by the strong Euro performance against other currencies where the 2013 average exchange rate is two per cent higher against the Swiss Franc, five per cent higher against the UK’s Sterling and four per cent higher against Norwegian Kronor compared to the 2012 average exchange rate used.

If we look at fees paid from an industry perspective the picture changes again. Industries that are known for paying their executives well also tend to come out higher for chair fees. But otherwise the pattern is complex for both chairs and other directors. There are some countries and industries where there is a strong correlation between size of company and pay, but others where the correlation is very weak. Some sectors with a higher focus on risk, such as the banking and pharmaceutical sectors, tend to pay higher director fees.

Austria €0

€100,000

€200,000

€300,000

€400,000

€600,000

€700,000

€800,000

* There were not sufficient data points available to provide a median for non-executive chairs in Spain as the large majority of companies in our sample have an executive chair in place.

Table 3: Median actual pay by industry

Health and Life Sciences Banks Consumer Services Automotive Insurance Utilities European median Natural Materials Consumer Goods

Non-executive chair total Median average director's total Median market cap (x100,000)

Technology Other financials Industrials Oil & Gas Communications Transport €0

€100,000

€200,000

For information on how the sectors have been categorised please see appendix.

©2014 Hay Group. All rights reserved

€500,000

€300,000

€400,000

€500,000

8

9

Non–executive directors in Europe

Comparing director pay to chair pay

Board structure

One factor that varies widely across Europe is the differential between average director pay and the pay of the chair of the board. Board chairs of UK and Italian companies are the most highly paid compared to other board directors, earning around four times the amount. By contrast, pay is much more evenly distributed across Dutch boards, where the median pay differential between fees earned by the chair and those earned by other directors is a multiple of just 1.34.

As part of our study, we examine board structure and the committees responsible for the most typical functional areas: audit, remuneration, risk and nomination. Many boards will also cover additional functional areas which can be more specific to their industry or line of operation and are, as a result, difficult to aggregate. We have included these functional areas as ‘other’. Since it is not unusual for one committee to cover more than one area, we have concentrated on the functional area of each, rather than on the specific name. That said, we note that approximately a third of our sample has extended the scope of the remuneration committee to include a wider human resources agenda and/or succession.

Table 4: Comparing non-executive chair vs. average directors’ pay

Most European countries have mandated the formation of an audit committee and as a result all the companies we reviewed across Europe have a committee in place to oversee audit. While this report is specifically aimed at the supervisory board (or non-executive members of the unitary board) elected at the Annual General Meeting, it is worth mentioning that all Italian companies with a unitary board have to have an external ‘statutory audit board’.3

UK Italy Switzerland European median Sweden

Unlike the audit committee, most countries have not specifically mandated the creation of a remuneration committee. However, 97 per cent of companies in our sample have a remuneration committee in place, showing no change on last year. All companies in the sample from Belgium, Finland, France, Netherlands, Spain, Switzerland and the United Kingdom have a remuneration committee in place. In contrast, only 77 per cent of German companies have a remuneration committee, which is down from last year when 88 per cent of the German sample had one.

France Germany Belgium Finland Norway Austria Netherlands 0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

Table 5: Comparing non-executive chair vs. average directors’ pay by industry

Health and Life Sciences Banks Consumer Services Utilities

Our data suggests that companies are placing greater importance on nomination, with many having newly formed committees to cover nomination and succession planning. This trend is not surprising in the light of the hype around boardroom diversity. Nomination committees are responsible for determining the characteristics sought in new executives and directors to serve in the best interests of the company and, by extension, consider the composition of the board. This year a total of 73 per cent of companies across Europe have put in place a committee whose responsibilities include nomination. This is a large increase on last year where 51 per cent of the European sample had a nomination committee in place. All companies from the UK and the Netherlands have a committee for nominations, while only 36 per cent of the Finnish sample run a nomination committee. For Norwegian and Swedish companies the common practice is to have external nomination committees which are not included in our statistics.

The prevalence of a committee covering risk is also becoming increasingly common across Europe at 22 per cent overall, up from 12 per cent last year. Separate risk committees tend to be more prevalent in industries which have inherent risk built into the business model, such as financial services and pharmaceuticals. As a result, the there is a high incidence of risk committees in the UK and Switzerland; countries with heavy representation from these sectors.

Insurance Industrials European median Automotive Other financials Natural Materials

The prevalence of committees with combined functions such as remuneration and nomination are very common in companies from Spain, France, Switzerland, Austria, Belgium and is also becoming more so in Finland.

Consumer Goods Technology Communications Oil & Gas Transport 0

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

The statutory audit committee (Collegio Sindacale) is required in Italy by law for companies with a unitary board structure. For companies adopting a dual board structure the statutory audit committee functions are taken over by the supervisory board. The statutory audit committee is composed by external certified professional experts in accounting and business law. The statutory audit committee monitors compliance with the law and corporate governance codes, the observance of the principles of correct administration, the adequacy of the company’s organisational structure and internal control systems.

3

* There were not sufficient data points available to provide a median for non-executive chairs in Spain as the large majority of companies in our sample have an executive chair in place.

©2014 Hay Group. All rights reserved

11

10 Non–executive directors in Europe

Independence

Table 6: Prevalence of board committees Prevalence of board committees that cover functional areas

Country

Median number of boards

Audit

Remuneration

Risk

Nomination

Austria

3.5

100%

95%

5%

60%

Belgium

3

100%

100%

11%

79%

Finland

2

100%

100%

5%

36%

France

3.5

100%

100%

22%

83%

Germany

5

100%

77%

12%

96%

Italy

3

100%*

97%

85%

73%

Netherlands

3

100%

100%

15%

100%

Norway

2

100%

83%

4%

-

Spain

3

100%

100%

23%

90%

Sweden

2

100%

96%

15%

-

Switzerland

4

100%

100%

30%

75%

UK

4

100%

100%

18%

100%

Europe

3

100%

97%

22%

73%

The table below shows the median number of board and committee meetings for each country.

Over the last year, Spanish directors met the most frequently in all categories, whereas Austrian directors consistently met fewer times than the European median.

Table 7: Committee meetings

While director independence is a well-established governance principle across much of Europe, each country has established its own definition of independence. For the purpose of this study, independent directors are those declared as such by their companies. Overall, a median of 78 per cent of directors in the Europe-wide sample are declared as independent, down from 85 per cent last year. Austria is the only country in the sample where boards are declared fully independent at the median. This compares to last year where companies from three countries, Finland, Netherlands and Switzerland, declared 100 per cent of their directors to be independent at the median.

Board structure and the concept of independence varies significantly from country to country across Europe. In Germany, board structure is strictly regulated and, unless they operate as a Societas Europaea (SE), German companies must operate a two-tier board with a supervisory board of legally independent members. Conversely, directors in Sweden may be declared to be independent but the Swedish definition of independence is much more relaxed than, say, in the UK.

Table 8: Independence levels in boards and committees (median per cent) Country

Board

Audit

Remuneration

Risk

Austria

100%

100%

100%

-

Belgium

62%

67%

67%

-

Finland

85%

100%

75%

-

France

60%

75%

83%

-

Italy

56%

100%

100%

100%

Netherlands

78%

100%

100%

-

Norway

79%

100%

100%

-

Spain

56%

67%

67%

100%

Sweden

71%

88%

67%

67%

Country

Board meetings

Audit committee

Remuneration committee

Nomination committee

Risk committee

Austria

6

3

3

3

-

Switzerland

96%

100%

100%

100%

Belgium

9

5

4

4

-

UK

86%

100%

100%

100%

Finland

10

5

5

4

-

European median

78%

100%

100%

100%

France

8

5.5

4

4

6.5

5.5

5

4

1

-

Italy

8

6

4

5

8

Netherlands

10

5

4

4

-

Norway

9

7

6

-

-

11.5

8

6.5

6.5

-

9

6

4

-

7.5

7.5

5

4

4

6

Sweden

UK

8

5

5

4

4

Switzerland

European median

8

5

5

4

6

European median

Germany

Spain Sweden Switzerland

Austria Belgium Finland France Italy Netherlands Norway Spain

UK 0%

10%

20%

30% Audit

* Both statutory audit boards and audit committees have been included for Italy.

Š2014 Hay Group. All rights reserved

40%

50%

Remuneration

60%

70%

80%

90%

100%

Risk

* No data on the independence of German board directors was available. However, unless German companies operate as a Societas Europaea, German companies must operate a two-tier board with a supervisory board of legally independent members.

13

12 12 Non–executive directors in Europe

Multi-chair responsibility

Table 9: Company-declared independent directors (median per cent of board)

The prevalence of the chair of the board also serving as a committee chair varies significantly from country to country. In Austria board chairs typically chair two committees while in the UK it is unusual for a board chair to also chair one of the committees.

Austria Switzerland UK

Board chairs are much less likely to chair the audit committee and, in some jurisdictions, are prevented from doing so by the local corporate governance codes. In six of the 12 countries in our sample, there are no cases where the board chair also chairs the audit committee.

Finland Norway Netherlands European median

There are fewer specific rules around whether or not the board chair can also chair the remuneration committee, and hence this is much more prevalent.

Sweden Belgium

Overall, since last year we have observed a reduction in additional committee chairmanship roles for board chairs, especially with regard to the audit committee.

France Italy Spain 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Table 11: Committee chairs held by board chair While it is useful to see the median number of directors on each board who have been declared independent, it is equally interesting to see how many companies have declared all of their directors as independent. Results vary widely across Europe. Spain sits at one end of the scale where not a single company has declared 100 per cent of its directors to be independent.

Conversely in Austria 61 per cent of the sample have stated that each and every one of their non-executive directors is independent. The European median has decreased to 17 per cent this year (from 28 per cent last year).

Austria Finland Germany Sweden Norway Belgium

As one would expect, there are much higher levels of independence within the sub-committees of the board. In Europe the audit, remuneration and risk committees are declared to be fully independent at the median.

Italy European median Netherlands Board chairs who chair both audit and remuneration committees Board chairs who chair audit committee Board chairs who chair remuneration committee Board chairs who chair risk committee

France Switzerland

Table 10: Prevalence of boards where all non-executive directors are declared independent

Spain UK

Austria

0%

Switzerland Finland Norway Netherlands UK European median Sweden Italy Belgium France Spain 0%

10%

20%

30%

40%

50%

60%

70%

* No data on the independence of German board directors was available. However, unless German companies operate as a Societas Europaea, German companies must operate a two-tier board with a supervisory board of legally independent members. Š2014 Hay Group. All rights reserved

10%

20%

30%

40%

50%

60%

70%

80%

90%

15

14 Non–executive directors in Europe

Diversity

International experience

The trend towards increased boardroom diversity is gathering pace as boards continue to be under pressure from both regulators and the public, in particular with regard to gender diversity. Over the last few years our results have shown that boards recognise the value gained from greater breadth of perspective in the boardroom and are acting on this in the nomination of new directors.

The diversity of international career experience obtained by directors also reflects the trend of director nationality: more and more companies are choosing to recruit directors with international expertise. Although there is still a high propensity of directors of European nationality (as opposed to a non-European nationality), more and more directors are entering the board who have gained the greater part of their career experience outside Europe.

Nationality

Across Europe, an average of 55 per cent of directors have spent the majority of their career experience in the same country in which they serve as a director (down from 62 per cent last year). 23 per cent of directors have experience from within other EU countries (last year 25 per cent) and 22 per cent, on average, have spent most of their career in a more international setting (last year just 13 per cent).

As part of our research we collected data on the diversity of directors in each company and found that while the results vary significantly from country to country, there is a strong trend towards more international boards. This year we found an average of 64 per cent of directors are from the country in which they serve, down from 66 per cent last year, 24 per cent are of other EU nationality (last year 22 per cent) and 12 per cent hold nationality from outside EU borders. The most internationally diverse countries are Belgium, Switzerland, the Netherlands and the UK. Table 12: Average nationality mix

Table 13: Average main career geographic experience mix

Austria

Austria

Germany

Germany

Finland

Italy

Sweden

Finland

Norway

France

European average

Sweden

UK

European average

France

Spain

Netherlands

Norway

Belgium

UK

Switzerland

Belgium

0%

Netherlands Switzerland

10%

20%

Main career experience in same country

0%

10%

20%

30%

40%

Same Country

50% Within EU

60%

70%

80%

90%

30%

40%

50%

60%

Main career experience in EU

70%

90%

100%

Main career experience outside EU

100%

Outside EU

* Insufficient data points were available to produce an average statistic for Italy and Spain.

Š2014 Hay Group. All rights reserved

80%

17

16 Non–executive directors in Europe

Gender

Gender pay gap

In recent years gender equality has dominated the diversity agenda and much of the debate has centred on the subject at continental and national levels. Different countries have adopted different approaches to boost female presence in the boardroom. Some have set internal targets while others, unsatisfied with the slow progress, have resorted to binding obligations through the use of strict quotas as a means to prioritise female hiring. Norway, which has had a long history of using gender quotas in the public sector, was the first country to implement such a quota for listed companies in 2003, forcing companies to have a 40 per cent female representation else face liquidation (or so it was threatened). Since 2008 five more countries in our sample (Italy, the Netherlands, France, Spain and Belgium – to be implemented in 2016) have taken up quotas.” to “Since 2008 six more countries in our sample (Italy, the Netherlands, France, Spain and, to be implemented 2016, Belgium and Germany) have or are introducing quotas. Non-complying firms are generally required to explain in their annual reports the reasons for non-compliance and state how they plan to meet the targets going forward. Strict quotas may also be on the horizon for other countries, such as the UK, if targets are not met by companies on a voluntary basis.

European companies continue to harbour a gender pay gap at the board level, though our data suggests that gap is beginning to narrow. The gap varies from country to country but male nonexecutive directors in Europe receive, at the median, nine per cent more in total fees than their female counterparts, excluding chairs (down from 10 per cent last year). Significant improvements have been seen in Italy and the Netherlands where the gender pay gap has decreased to four per cent (from 22 per cent last year) and two per cent (from eight per cent last year) respectively. Norway ranks highest in terms of pay equity and has no pay gap at the median. In contrast the gap broadens to as much as 22 per cent in Germany and 18 per cent in Austria.

In November 2013, the European Commission released a proposal to extend the egalitarian measures already in place in some countries to the single market. Specifically, it requires all publicly listed companies in Europe to ensure that at least 40 per cent of board seats are filled by women by 2020.

Companies will be required to commit to achieving the quota through concrete measures and any lack of success will have to be explained to the authorities. The proposal is pending approval from the 28 member states.

On the other side of the Atlantic, the US is considering using a system of incentives and penalties based on a company’s success in gender equity. The federal government already uses tax incentives to encourage certain business practices, and it is thought that this could extend to gender practices.

Across Europe, 77 per cent of directors are male down from 79 per cent last year. This year Austria overtook Italy as being the country with the highest number of male directors with an 88 per cent presence. In Italy female representation has been steadily increasing from three per cent in 2011 to 16 per cent this year.

At the other end of the scale, Nordic countries continue to lead the way in gender diversity with the highest proportion of female directors on boards. Our study shows that 38 per cent of Norwegian directors are women, brought about through binding legislation. Sweden and Finland have also seen the proportion of female directors’ increase in recent years to 30 per cent and 26 per cent respectively without the use of such quotas.

Table 14: Average gender mix Austria Italy Spain Switzerland Germany Belgium Netherlands European average UK France Finland Sweden Norway 0%

10%

20%

30%

40% Male

©2014 Hay Group. All rights reserved

50% Female

60%

70%

80%

90%

100%

The pay gap appears to result mainly from an underrepresentation of women on the strategically important board committees (see below), which has translated into women board members being paid significantly less than men.

Table 15: Median gender pay gap

Germany Austria France Belgium UK European median Italy Sweden Switzerland Finland Netherlands Spain Norway 0%

5%

10%

15%

20%

25%

There also remains an absence of women at the top. This year only three per cent of non-executive chairs are women (four per cent last year). Similarly the number of women holding the position of chair of the audit and risk committees has fallen to 12 per cent (from 13 per cent last year) and 13 per cent (from 17 per cent last year). However, we are seeing a greater proportion women assume the position of deputy chair/ senior independent director (12 per cent of sample from six per cent last year) and remuneration chair (13 per cent of sample from eight per cent last year).

19

18 Non–executive directors in Europe

Age

Table 16: Gender representation in board roles Role

Male

Female

Non-executive chair

97%

3%

Executive chair

83%

17%

Deputy chair / SID

88%

12%

Audit chair

88%

12%

Remuneration chair

87%

13%

Risk chair

87%

13%

Boardroom diversity also extends to director age. Notwithstanding, boardroom age carries a lower profile than some of the other areas of diversity and relatively few European companies choose to impose a compulsory retirement age.

This year the youngest median average director age was 57 in Austria, Finland and Norway, while the oldest median average age was 62, in the Netherlands. The European median average board age is 60.

These figures show little change on last year.

However, some marked gender differences in age can be observed across the European sample.

The largest age gaps are seen in Germany, Italy, the Netherlands and Norway, where the median average age for male directors is around eight years older than female directors. The smallest age gap is seen in Finland, where there is less than a three year age gap between male and female directors.

More telling is the number of companies that do not have any female representation at all on their board committees. Although this is still common, the position is improving. The number of audit and remuneration committees across Europe with no female presence continues to diminish and was 34 per cent for the audit committee (last year 43 per cent) and 40 per cent for the remuneration committee (last year 48 per cent). France has the best record for women on committees. At the other end of the scale, Austria and Germany display very low levels of female representation in both the audit and remuneration committees.

Although there is a clear trend towards bringing more women onto boards this does not mean that all new appointments go to women, though the percentage is definitely larger than it used to be.

A total of 38 per cent of all new directors in our sample are women, joining boards at a median age of 53, four years younger than the median age of 57 for new male directors.

Table 17: Prevalence of committees without female members

Table 18: Median average board age

Country

Audit committee

Remuneration commtitee

Risk commtitee

Austria

80%

79%

–

Belgium

44%

39%

–

Finland

14%

55%

–

One per cent of companies in the European sample have a median average director age of under 50, which increases to six per cent when looking at a median average age of under 55. The proportion of companies whose directors have a median average age of under 55 is 20 per cent of the Austrian sample, dropping to three per cent of the UK sample and zero per cent of the Dutch sample.

Netherlands France Switzerland Italy UK Germany

France

14%

31%

0%

Germany

68%

75%

–

Belgium

Italy

71%

42%

28%

Sweden

Netherlands

42%

26%

–

Norway

14%

39%

–

Spain

41%

39%

80%

Sweden

15%

46%

50%

Switzerland

60%

55%

17%

UK

22%

24%

24%

European prevalence

34%

40%

32%

European median

Finland Austria Norway 40

45

50 Board

Male directors

55

65

To calculate the median director age, we first calculated the median age of directors per company provided that a minimum of five data points were available. We then calculated the overall country median provided that a minimum of five company medians were available. There were insufficient data points to provide a median age for Spain.

*Insufficient data points were available to produce a median average statistic for Spain.

©2014 Hay Group. All rights reserved

60

Female directors

21

20 Non–executive directors in Europe

Multiple board positions This year we have looked into the number of directors who serve on multiple boards. Although the analysis is limited as we only test multiple memberships of large European corporations’ boards the results show that the power concentration is not as significant as much public debate will have it.

The introduction of stricter regulation combined with higher skill requirements has undoubtedly led to a tightened market in the search for ‘suitable’ non-executive directors to fill board positions.

Since 2013, Dutch law dictates the maximum number of positions a director may hold. The limit to the number of positions is devised using a ‘point’ system, where board/committee chairmanship constitutes two points and membership constitutes one point. Directors are not allowed to exceed a total of five points. This new law will potentially have a significant impact on director remuneration, in particular on chairman fees.

In our sample, 10 per cent of directors of large listed companies across Europe serve on two boards and some 4 per cent on three or more boards. The greatest number of boards that an incumbent serves on in our sample is six. There are also a number of board chairs that serve as chair on more than one board. In our sample 11 per cent of chairs did so and the greatest number of chairs any individual holds is three.

Of the directors who serve on multiple boards, 78 per cent are male and 22 per cent are female directors, which is representative of the male versus female ratio in the entire sample.

Of the directors who serve on multiple boards, about a third serve on the boards of companies based in different countries. All the 12 nationalities are represented, and more, but German, French and Swedish directors are more likely than others to sit on multiple boards.

©2014 Hay Group. All rights reserved

Country analysis – Europe In this section, Hay Group consultants provide country-by-country analyses and comparisons of board composition and remuneration trends, as well as a typical director profile for each country.

To discuss these findings further, please contact the relevant Hay Group consultant.

23

22 Non–executive directors in Europe

The levels of international experience brought in by board members remains more or less unchanged from last year. On average 73 per cent of directors have gained the greater part of their work experience from Austria, 24 per cent have earned it from other European countries and just 3 per cent have obtained it outside of Europe. Similarly, Austrian boards demonstrate a high propensity for Austrian nationals (87 per cent of the sample). 10 per cent are from elsewhere in Europe and 3 per cent are non-Europeans. However we expect to see changes going forward with changes brought in under the Second Stability Act (2012) requiring boards to pay closer attention to the internationality and competence of their directors.

William Eggers

Nora Gruhle

+49 69 50 50 55 220 william.eggers@haygroup.com

+49 6 50 50 55 324 nora.gruhle@haygroup.com

Austria All companies in Austria operate a two-tier board. A typical Austrian board is comprised of eight directors and boards run four committees at the median.

All companies in the Austrian sample have committees which cover audit, 95 per cent cover remuneration, 60 per cent cover nomination. Only one company in the sample formally has a risk committee. At the median Austrian boards meet six times over the year with committees meeting three times a year to discuss audit, remuneration and nomination matters.

It is common for the board chair to assume the responsibility of chairing two committees in addition to the board. In 63 per cent of cases the board chair also chairs both the audit and remuneration committees. Power concentration is therefore the highest in Austria, making the low fees even more surprising.

Employee representation in Austria is regulated under the Labour Code which came into effect in 1974. It states that workers have the right to be represented by up to one third of members on the supervisory board. Employee representatives do not receive fees for their participation on the supervisory board (whose fees are not included in this survey). Employee representation also extends to large private companies.

Independence is treated seriously in Austria, with boards, audit committees and remuneration committees all declaring themselves 100 per cent independent at the median. Under the Second Stability Act (2012), management board members of listed companies must normally wait for a minimum of two years before putting themselves forward for candidature onto the supervisory board.

Director pay in Austria continues to be the lowest in Europe, with board chairs now earning €57,100 at the median in actual fees (up from €52,500 last year) and other directors earning €29,900 at the median average (up from €26,600 last year).

Director pay is generally built on basic fees and meeting fees, with some companies also choosing to pay committee fees. In all but one case, basic pay is delivered in fixed cash, with one company in the sample splitting basic fees into fixed and variable cash. There continues to be discussion around whether director fees should be broken down into fixed and variable components with a view to aligning director fees to company results, so we may see an increase in variable pay in the future.

©2013 Hay Group. All rights reserved ©2014

Gender diversity levels remain unchanged from last year, where on average 88 per cent of directors are male. Again, we expect to see Austria making headway in this regard following the revision of the Austrian Corporate Governance Code (UGB) in July 2012 as well as the Second Stability Act (2012), which places greater importance on bringing more women onto boards. Although there is no quota for women, the Austrian Corporate Governance Code stipulates that listed companies are required to compile a corporate governance report that should include measures to promote the entry of women onto the supervisory board as well as the management board.

Austria has the joint youngest median director age at 57 (on a par with Finland).

Element

Median Fees

Companies

Policy fee and structure prevalance Non-executive chairman basic fee

€ 30,000

15

Non-executive director basic fee

€ 15,000

15

€ 750

10

Additional* fee for deputy chairman

€ 7,500

14

Additional* fee for audit committee chairman

€ 10,000

5

Additional* fee for audit committee members

€ 5,000

5

€ 500

10

Additional* fee for remuneration committee chairman

€ 10,000

5

Additional* fee for remuneration committee members

€ 5,000

5

€ 500

10

Non-executive chairman total fee

€ 57,100

18

Average non-executive director total fee

€ 29,900

18

Board meeting attendance fee

Audit committee meeting attendance fee

Remuneration committee meeting attendance fee Actual fee received

* In addition to non-executive director basic fee

Typical non-executive director profile in Austria Age:

57

Gender:

Male in 88 per cent of instances

Nationality:

Austrian in 87 per cent of instances

Most significant work experience:

Gained within Austria in 73 per cent of instances

25

24 Non–executive directors in Europe

the median against €12,500 for audit chairs, and remuneration members now earning a median average of €6,250 against €6,125 for audit members.

Directors are typically not bound to any shareholding requirements, nor are there any shareholding requirements for them to follow.

Walter Janssens +32 2 333 74 56 walter.janssens@haygroup.com

Belgium The majority of Belgian companies operate a unitary board, with only a fifth of our sample operating a two-tier board. A typical Belgian company consists of 12 directors with no employee representatives.

At the median there are three committees per company. All companies in our sample have committees for audit and remuneration, and 79 per cent have a nomination committee. Typically Belgian boards will meet nine times over the year and committees will meet five times a year to discuss audit, and four times a year to discuss remuneration and nomination matters.

Chairing both the board and a subcommittee of the board is a common occurrence in Belgian companies. In one third of companies in the sample, the board chair also chairs the remuneration committee.

The number of independent directors is on the rise in Belgium. This year boards in our sample were declared as being 62 per cent independent at the median (up from 57 per cent last year). By law, only the remuneration committee chair is required to be independent.

Director pay levels in Belgium are becoming more competitive by European standards. This is perhaps as a result of boards paying closer attention to board effectiveness which has resulted in significant changes to the board composition (including board chairs). The median actual fees for board chairs has increased to €170,000 (from €107,500 last year). Actual fees for other directors have also increased, though not as much: this year’s median average director fee now sits at €78,750 (from €72,300 last year). As a result the pay ratio between the actual fees earned by the board chair and those earned by other directors has widened to 2.08 at the median (from 1.49 last year).

Policy pay in Belgium is generally made up of basic fees, committee fees and meeting attendance fees. Basic fees are paid entirely in basic cash in all but one company in the sample. Directors are paid only in cash as equity payments are forbidden by Belgian corporate law. The basic fee for board chairs has significantly increased this year to €100,000 at the median (from €78,500 last year). The median basic fee for all other directors has increased to €35,000 (from €30,000 last year). Committee fees for chairing and participating in the remuneration committee have now overtaken those for the audit committee, with remuneration chairs now earning €13,750 at

©2014 Hay Group. All rights reserved

Belgium has imposed a gender quota which legally binds companies to ensure that at least one third of board seats are filled by women by 2016. Our data shows that companies in Belgium are moving towards target levels though there is still some distance to go. On average 19 per cent of board roles in Belgium are filled by women, a significant increase from 12 per cent last year.

The gender pay gap continues to narrow, albeit slowly, and now stands at 10 per cent at the median (from 12 per cent last year).

Belgium has long shown healthy levels of diversity in terms of international experience. On average 40 per cent of directors have gained their main work experience in Belgium, 43 per cent have worked the majority of their career in other countries within Europe, and 17 per cent bring in the bulk of their work experience from outside of Europe (up from 12 per cent last year). In terms of nationality, there is also a near even split between directors of Belgian nationality and those who are from other European countries: On average 46 per cent are from Belgium, 44 per cent are from elsewhere in Europe and nine per cent are from outside Europe. The trend towards further internationalisation is essential given the importance of “export” driven growth for Belgian companies.

The median director age has decreased by one year this year to 59.

Element

Median Fees

Companies

Policy fee and structure prevalance Non-executive chairman basic fee

€ 100,000

17

Non-executive director basic fee

€ 35,000

17

Board meeting attendance fee

€ 2,750

10

Additional* fee for audit committee chairman

€ 12,500

9

Additional* fee for audit committee members

€ 6,130

8

Audit committee meeting attendance fee

€ 2,250

12

Additional* fee for remuneration committee chairman

€ 13,750

6

Additional* fee for remuneration committee members

€ 6,250

7

Remuneration committee meeting attendance fee

€ 2,000

12

Non-executive chairman total fee

€ 170,000

17

Average non-executive director total fee

€ 78,750

19

Actual fee received

* In addition to non-executive director basic fee

Typical non-executive director profile in Belgium Age:

59

Gender:

Male in 81 per cent of instances

Nationality:

Belgian in 46 per cent of instances

Most significant work experience:

Gained within Belgium in 40 per cent of instances

27

26 Non–executive directors in Europe

In the majority of cases director fees consist of basic fees and meeting attendance fees. Few companies also pay for committee chairmanship or membership. The exception to this rule applies to audit chair retainer fee, where 41 per cent of the sample pay such a fee. In around two-thirds of cases, basic fees in Finland are delivered in both cash and shares which are non-performance related, with the cash portion normally being larger than the equity portion. Only one third of the sample delivers basic fees solely in cash. The total actual amount earned in basic fees stands at €97,000 at the median for board chairs and €46,920 at the median for other directors. Meeting fees for board, audit and remuneration committee attendance is €600 at the median.

Juhani Ruuskanen +358 9 4133 6600 juhani.ruuskanen@haygroup.com

Finland Finnish companies operate the least number of formal committees in our European sample, having just two committees at the median. All companies in the Finnish sample have an audit and a remuneration committee, and 36 per cent have a nomination committee. Risk is an area which is only formally covered by one company in the sample. However, we are seeing the role of the remuneration committee broaden in some companies to include succession planning, an area normally covered by nomination committees. Human capital issues are also increasingly being tackled at board level.

Finland ranks very highly in terms of gender diversity, where on average 26 per cent of board positions are filled by women. This figure increases to 39 per cent when considering positions in the audit committees but decreases to just 15 per cent when looking at the composition of remuneration committees. Progress has been made without the introduction of any strict quotas, which are regarded as rather negative in Finland.

Finland is not particularly diverse in terms of the level of international expertise brought in by its board of directors compared to some of the other countries included in this study. On average 68 per cent of director have gained the majority of their work experience from within Finland, 23 per cent from other European countries and 9 per cent from outside of Europe. Regarding the nationality of its directors, on average 73 per cent are Finns, 23 per cent are of other European nationality and 4 per cent are from outside Europe.

Finland has a relatively young median director age, which remains at 57.

It is common for the board chair to also chair another committee. In 82 per cent of cases it is the remuneration committee and in 5 per cent of cases it is the audit committee. Typically Finnish boards will meet 10 times over the year and committees will meet five times during the year to discuss audit and remuneration and four times over the year to discuss nomination.

Element

Finnish boards are typically made up of eight directors at the median with no employee representatives on the board.

Board meeting attendance fee

Finnish companies maintain a high level of independence. This year Finnish boards declare their directors to be 85 per cent independent at the median.

Audit committees in Finland have higher levels of independence and are declared to be 100 per cent independent at the median, which compares to 75 per cent in remuneration committees.

Around two thirds of the sample have disclosed formal shareholding guidelines, yet only one company in the sample has disclosed having shareholding purchase requirements. It is worth noting that fee payment in the form of equity with no performance conditions attached is permitted by the 2010 Finnish Corporate Governance Code and as a result is very prevalent.

Director fees in Finland are fairly moderate and have not changed in the last five years as boards have been unwilling to increase fees in the face of recession. This year Finland ranks as the third lowest paying country in the European sample. In terms of actual fees, this year board chairs have earned €98,270 at the median (€101,200 last year) and other directors have earned €63,530 at the median average (€57,980 last year). The median pay differential between actual fees earned by board chairs compared to other directors remains comparatively low at just 1.72.

Median Fees Policy fee and structure prevalance

Non-executive chairman basic fee

€ 97,000

22

Non-executive director basic fee

€ 46,920

22

€ 600

16

Additional* fee for deputy chairman

€ 13,200

21

Additional* fee for audit committee chairman

€ 15,000

9

Audit committee meeting attendance fee

€ 600

17

Remuneration committee meeting attendance fee

€ 600

17

Non-executive chairman total fee

€ 98,270

20

Average non-executive director total fee

€ 63,530

21

Actual fee received

* In addition to non-executive director basic fee

Typical non-executive director profile in Finland Age:

57

Gender:

Male in 74 per cent of instances

Nationality:

Finnish in 73 per cent of instances

Most significant work experience:

Gained within Finland in 68 per cent of instances

This year’s Finnish sample does not include Nordea Bank, which has been included in the Swedish sample.

©2014 Hay Group. All rights reserved

Companies

29

28 Non–executive directors in Europe

earning €3,000 at the median. Paying for board meeting attendance is not as common as paying for committee meeting attendance, with only one fifth of companies doing so, where board meeting fees are €5,000 per meeting at the median.

French law no longer requires directors to be shareholders.

Companies are increasingly seeking to enhance the diversity of their boards, particularly through competency training. In France there are formal training structures for directors. In particular, IFA (“Institut Français des Administrateurs”) which founded the first certification program in France, proposes there be a training period for directors which includes international training.

Jérôme Rambaldi

Caroline Robard

+33 173 443 550 jerome.rambaldi@haygroup.com

+33 173 443 464 caroline.robard@haygroup.com

France Most French companies operate a unitary board, with only 14 per cent of our sample running a double-tiered board. The vast majority of board chairs in French companies are executive chairmen: only one fifth of companies in the sample have a non-executive director who serves as board chair.

The median number of directors sitting on the board is up by one from last year and now stands at 15 directors.

French companies typically run four committees. Each company in the sample has an audit and remuneration committee. Some 83 per cent of the sample also have a separate nomination committee and 22 per cent also have a separate risk committee. Since most board chairs are executive chairmen, it is rare for the board chair to also chair a subcommittee of the board. This year French boards met eight times over the year at the median and committees met at the median six times to discuss audit matters, four times to discuss remuneration and nomination and seven times to discuss risk matters.

The situation surrounding gender diversity continues to improve in France. Companies are on track to reach the legal quotas set in 2012 which states that by 2014 companies have at least 20 per cent female directors on boards, which will increase to 40 per cent by 2017. This year our figures show that on average companies have 25 per cent female directors at board level, and the distribution within the audit and remuneration committees is also strong where there is an average of 34 per cent and 23 per cent of positions filled by women respectively.

Boards continue to diversify in terms of the nationality and levels of international experience brought in by its directors. The French boardroom is one of the most internationally diverse in the sample.

International experience is clearly a valued attribute, and there is now only an average of 50 per cent of board members who have obtained the majority of their work experience within France (versus 56 per cent last year), while 29 per cent bring in the bulk of their work experience from other European countries and 21 per cent have obtained most of their work experience from outside of Europe. Diversity through nationality is not quite as varied: on average 69 per cent are of French descent, 20 per cent are of other European descent and 11 per cent come from outside of Europe.

Element

Median Fees

Companies

Policy fee and structure prevalance Non-executive chairman basic fee

€ 225,210

7

Non-executive director basic fee

€ 31,500

28

Board meeting attendance fee

€ 5,000

7

Additional* fee for deputy chairman

€ 28,500

10

Additional* fee for audit committee chairman

€ 20,000

27

Additional* fee for audit committee members

€ 10,000

17

Audit committee meeting attendance fee

€ 3,000

15

Additional* fee for remuneration committee chairman

€ 14,260

24

Additional* fee for remuneration committee members

€ 8,200

16

In terms of actual pay, we have observed a drop in fees for board chairs which now stands at €202,120 at the median (against €244,170 last year). However, as aforementioned, the sample is small since the vast majority of board chairs are executives and median figures for actual pay for executive chairmen is €1,618,520. Conversely, actual fees received by other directors is up on last year, and the median average now stands at €63,890 (from €56,720 last year).

Remuneration committee meeting attendance fee

€ 3,000

15

Non-executive chairman total fee

€ 202,120

6

Policy pay is generally comprised of a basic fee and a committee fee. Fees for meeting attendance is also provided in about half the sample. Basic fee levels tell a similar story to actual pay levels: The basic fees received by non-executive chairs has dropped this year to €225,210 (from €285,000 last year) while those earned by other directors has increased to €31,500 (from €23,000 last year).

Average non-executive director total fee

€ 63,890

36

Independence has come under the spotlight in France. The AFEP-MEDEF governance code recommends that the proportion of independent directors should be above 50 per cent (or 33 per cent if there is a controlling shareholder) in order to improve board effectiveness. This year, boards are declaring themselves to be 60 per cent independent at the median, but we observe higher levels of independence in both the audit and remuneration committee where median figures stand at 75 per cent and 83 per cent respectively.

As of 2015, French companies will be required to appoint one or two employee representatives onto their boards. The AFEP-MEDEF code also recommends that an employee representative participates on the remuneration committee.

Audit chairs earn €20,000, and remuneration chairs earn €14,260 at the median. Audit committee members also earn higher fees than their counterparts in the remuneration committee, the former earning €10,000 and the latter earning €8,200 at the median. With regards to meeting attendance fees, parity has been reached amongst audit and committee chairs and members, with all parties

©2014 Hay Group. All rights reserved

Actual fee received

* In addition to non-executive director basic fee

Typical non-executive director profile in France Age:

61

Gender:

Male in 75 per cent of instances

Nationality:

French in 69 per cent of instances

Most significant work experience:

Gained within France in 50 per cent of instances

31

30 Non–executive directors in Europe

William Eggers

Nora Gruhle

+49 69 50 50 55 220 william.eggers@haygroup.com

+49 6 50 50 55 324 nora.gruhle@haygroup.com

Germany German companies are built on two-tier board structure as prescribed by German law, and consist of 12 board members at the median. German companies typically run five committees (at the median), the largest median figure in Europe. All companies have committees which cover the areas of audit, 96 per cent have committees which cover nomination, 77 per cent have a remuneration committee and 12 per cent have a risk committee.

It is usual for the board chair to also lead the remuneration committee (80 per cent of sample). In no case does the board chair also chair the audit committee. This year’s figures show that audit committees met five times at the median and remuneration committees met four times at the median.

Nomination committees typically meet much less frequently, only one time per year at the median.

Employee representation within the Supervisory board is required in companies employing more than 500 people. In such companies, employee representatives must fill at least one third (but no more than half ) of positions. In companies which employee over 2,000 people, it is the board chair who has the casting vote in the case of split resolutions.

Board Effectiveness is an area which is becoming increasingly regulated. Higher skill requirements are being placed on directors of the supervisory board. Finding the right talent for the supervisory board is becoming increasingly challenging given the increasing time commitment involved to perform the role. The German Corporate Governance Code states that all members of the supervisory board are required to arrange the necessary training for their directors, supported by the company as appropriate. This has created a market for external providers offering their services to improve and audit the qualifications of members of the supervisory board.

There are fairly strict guidelines surrounding the independence of directors. The German Corporate Governance Code recommends that the supervisory board shall include what it considers an adequate number of independent members. Independence,

by German standards, is defined as not having any personal

©2014 Hay Group. All rights reserved

€77,500 last year). There remains a discrepancy in the amounts paid in committee fees to audit and remuneration committee participants, with the committee chairs of each committee earning €75,000 (up from €60,000 last year) and €40,000 (no change on last year) respectively at the median, and with other members earning €40,000 (no change on last year) and €20,000 (no change on last year) respectively at the median. It is not uncommon for chairs and members of the nomination and other non-mainstream committees not to earn any committee fees for work undertaken in these committees. Board and committee meeting fees are typically €1,000 per meeting.

or business relations with the company, its executive bodies, a controlling shareholder or any other enterprise associated with the latter. It is recommended that no more than two former members of the management board sit on the supervisory board.

Former management members who wish to be appointed to the supervisory board are generally required to wait at least two years before assignment. Further, directors should not exercise directorships or similar positions or advisory tasks at competing companies.

Actual fees received by directors are significantly up on last year. This year board chairs received €331,700 at the median (up from €257,000 last year) while other directors received a median average of €125,340 (up from €118,360 last year). The pay differential between the two is 2.22, similar to last year at 2.17.

Policy pay is generally built on three components: a basic fee, a committee retainer fee as well as meeting attendance fees. In about half the sample, the basic fee component is split between a fixed and variable portion. However, it should be noted that the German government has called for a restriction in the variable portion. In response to these calls, some companies have eliminated the variable component altogether but have inevitably off-set the overall fee decrease by increasing the fixed component.

Where variable pay is included, it is most often based on profits or dividends as opposed to a defined target cash amount, thus differentiating non-executive director pay from the pay of executive directors. In the future, it is expected that companies who do not drop the variable pay component base performance on the sustainable growth of the enterprise.

As far as committee fees are concerned, fees are usually based on a proportion the total basic fees. Since a substantial number of German companies in the sample use a form of variable basic fees, we have only been able to calculate the committee fees off the guaranteed fixed portion of the basic fee because the variable component can be very variable. This accounts for the seemingly low policy figures when compared against actual fees. It is unusual for German companies to grant stock to directors.

At policy level, basic fee levels are up this year with board chairs earning a basic fee total of €198,750 (up from €187,500) while other directors earn a basic fee of €94,380 (up from

Board diversity remains a much debated topic in Germany, and public pressure over the issue has spurred on the introduction of a statutory quota for women on boards. Under the proposed law, from 2016 at least 30 per cent of board positions at companies listed on the German Stock Exchange are to be held by women.

Companies unable to appoint women to at least 30 per cent of open board seats from 2016 are likely to be required to leave those seats vacant until a suitable female candidate fills the position. In 2015, large German companies must also set their own binding goals for increasing the amount of female directorships on both their supervisory and management boards. Figures this year show that most companies are far from reaching this target: This year,

on average 19 per cent of positions are filled by females on the supervisory board (up from 15 per cent last year). Gender numbers in both the audit and remuneration committees are lower still, with an average of around 10 per cent in both. The gender pay gap is significant and remains at 22 per cent at the median.

With regards to the composition of boards, the German Corporate Governance Code recommends that companies take into account their international activities. However directors with extensive international experience are few and far between. There is currently no additional reward for having international experience.

But as companies begin to comply with the code, having international experience will make a director more attractive candidate. There has been a marginal improvement in terms of the diversity of international experience brought into the supervisory board by its directors. This year an average of 68 per cent of directors have gained the majority of their experience in Germany, 21 per cent having gained it within Europe and 10 per cent having gained it outside of Europe. Germany has actually become less diverse in terms of the nationality of its directors with, on average, 84 per cent of its directors coming from Germany (up from 77 per cent last year), 13 per cent coming from other countries within Europe and 3 per cent coming from outside of Europe.

Element

Median Fees

Companies

Policy fee and structure prevalance Non-executive chairman basic fee

€ 198,750

24

Non-executive director basic fee

€ 94,380

24

Board meeting attendance fee

€ 1,000

16

Additional* fee for deputy chairman

€ 40,000

24

Additional* fee for audit committee chairman

€ 75,000

20

Additional* fee for audit committee members

€ 40,000

20

Audit committee meeting attendance fee

€ 1,000

16

Additional* fee for remuneration committee chairman

€ 40,000

15

Additional* fee for remuneration committee members

€ 20,000

15

Remuneration committee meeting attendance fee

€ 1,000

12

Non-executive chairman total fee

€ 331,700

25

Average non-executive director total fee

€ 125,340

26

Actual fee received

* In addition to non-executive director basic fee

Typical non-executive director profile in Germany Age:

60

Gender:

Male in 81 per cent of instances

Nationality:

German in 84 per cent of instances

Most significant work experience:

Gained within Germany in 68 per cent of instances

33

32 Non–executive directors in Europe

This year, audit chairs earned €26,362 in committee fees at the median and members of the audit committee earned €18,415, small decreases on last year which are attributable to a decrease in sample size. Remuneration chairs earned €20,000 (no change on last year) and remuneration members earned €15,032 (down from €20,000 last year). Risk committees are now in place in 85 per cent of the sample. This year risk chairs earned €30,000 in committee fees and members of the risk committee earned €20,000 at the median.

Directors in Italy are paid solely in cash. Equity arrangements are generally frowned upon.

Enor Signorotto

Matteo Fiocchi

+39 02 7716 218 enor.signorotto@haygroup.com

+39 02 7716 209 matteo.fiocchi@haygroup.com

Italy The majority of Italian companies operate a unitary board, with only 27 per cent of the sample operating a two-tier board. The number of board directors is 10 at the median (down from 12 last year). No employee representatives sit on the board, and it is not thought to change in the short term.

There are, however, discussions around introducing employee representation in the boards of large private companies (such as at POSTE).

Italian companies tend to run three committees. All companies in the sample have an audit committee, 97 per cent a remuneration committee and 73 per cent a nominations committee.

Risk is covered by 85 per cent of the sample. There are typically eight board meetings in a year.

At the median directors meet six times per year to discuss audit, four times to discuss remuneration, eight times to discuss risk and five times to discuss nomination.

Independence is taken seriously in Italy. Boards have to go through a formal process of certifying the independence of their non-executive directors every year. This year companies declare that 56 per cent (at the median) of their non-executive directors are independent. This increases to 100 per cent within the audit, remuneration and risk committees. It is expected that independent directors will become more involved with investor engagement, especially independent directors in the remuneration committee when communicating executive reward matters.

Executive board chairs are common in Italy, with more than half of the sample (55 per cent) having one.

This year board chairs have earned a median total remuneration of €451,100 in actual pay, a significant increase on €375,000 last year, ranking the second most highly paid in Europe. Fees for other directors have also risen to a median average of €90,330 (€84,240 last year), ranking fifth highest out of the 12 countries in our survey. The gap between the fees earned by board chairs and other directors has decreased, but is still one of the highest in Europe, with a pay differential of 3.95 at the median (4.46 last year).

While policy fees have increased to €400,000 at the median for board chairs (from €355,000 last year), there has been no change in policy pay for other directors and their fees remain at €50,000 at the median.

Director pay is typically based on an annual fee and a committee fee. Fewer companies pay on a meeting attendance basis. Director pay in Italy is becoming an issue: as the time commitment increases directors are not allowed to serve on as many boards as in previous years. Nor do fees increase for good reputation.

©2014 Hay Group. All rights reserved

Boards in Italy are certainly diversifying. Regulators (such as the Bank of Italy in the financial services sector) are focusing on board composition and effectiveness and formal induction programs are becoming the norm for listed Italian companies. The number of female directors is increasing as a result of legislation: “Gender balance on the boards of listed companies” came into effect in July 2011 and requires at least one third of director positions to be held by women by 2015. This law has proven to be effective at bringing women into the boardroom. There are, on average, 84 per cent male and 16 per cent female directors (last year: 11 per cent female directors), though there is still some distance to go before meeting the quota The number of foreign directors is also on the rise. In terms of nationality, on average 77 per cent of directors are Italians, 16 per cent are from Europe and seven per cent are non-Europeans. No additional reward is given to foreign directors.

Element

Median Fees

Companies

Policy fee and structure prevalance Non-executive chairman basic fee

€ 400,000

15

Non-executive director basic fee

€ 50,000

25

Board meeting attendance fee

€ 1,500

5

Additional* fee for deputy chairman

€ 62,500

6

Additional* fee for audit committee chairman

€ 26,360

5

Additional* fee for audit committee members

€ 18,420

4

Additional* fee for remuneration committee chairman

€ 20,000

16

Additional* fee for remuneration committee members

€ 15,030

16

Remuneration committee meeting attendance fee

€ 1,500

7

Additional* fee for risk committee chairman

€ 30,000

13

Additional* fee for risk committee members

€ 20,000

13

Risk committee meeting attendance fee

€ 1,500

7

Non-executive chairman total fee

€ 451,100

12

Average non-executive director total fee

€ 90,330

25

Actual fee received

* In addition to non-executive director basic fee

Typical non-executive director profile in Italy Age:

61

Gender:

Male in 84 per cent of instances

Nationality:

Italian in 77 per cent of instances

35

34 Non–executive directors in Europe

In terms of pay policy, director fees are generally built on two components: basic fees and committee retainer fees. Basic fees this year show no change on last year, with board chairs earning €80,000 and other directors earning €50,000 at the median in basic fees. There has been a slight change in median committee retainer fees (due to a change in the sample) from last year, with audit chairs now earning €12,750 against the €10,000 earned by their remuneration counterparts, and audit members now earning €9,000 against the €7,250 earned by their remuneration counterparts. Paying on a meeting attendance basis does happen but is becoming relatively rare.

In all but one case fees are delivered entirely in cash (i.e. non-performance based) in accordance with Dutch corporate governance requirements.

Eric Engesaeth +31 88 8 929 611 eric.engesaeth@haygroup.com

The Netherlands As a matter of law and practice Dutch companies typically have a double tier governance structure, as is the case for 90 per cent of our Dutch sample. The two companies in the sample which operate a unitary board are the only companies in the sample to have executive chairmen. There are eight directors sitting on Dutch boards at the median and, until recently, employee representation was rare but it is now becoming more prevalent.

A typical Dutch company will run three subcommittees of the board, with all companies in the samples covering audit, remuneration and nomination. Risk is covered by 15 per cent of the sample.

The audit and risk committees met five times over the course of the year, and the remuneration and nomination committees typically meet four times at the median. Dutch boards met ten times over the year at the median.

Board effectiveness continues to make the headlines. The disclosure of board self-evaluations are becoming the norm in listed companies.

Since 2013, Dutch law dictates the maximum number of position a director may hold. The limit to the number of positions is devised using a ‘point’ system, where board/committee chairmanship constitutes two points and membership constitutes one point. Directors are not allowed to exceed a total of five points. This new law will potentially have a significant impact on director remuneration, in particular on chairman fees. Consequently several companies have significantly increased their fees.

Dutch corporate Governance states that board chairs should not chair the audit or remuneration committees. In the majority of cases Dutch companies abide by this recommendation, with only one board chair also chairing the audit committee and two board chairs also chairing the remuneration committee. It is more common for a deputy chair to also chair one of these committees, which occurs in 30 per cent of companies in the Dutch sample.

Levels of board independence are high in the Netherlands. Dutch boards are declared to be 78 per cent independent at the median, with both the audit and remuneration committees reaching 100 per cent independence at the median. Notwithstanding director fees in the Netherlands do not stack up so well against the rest of Europe, with directors still earning relatively low fees by European standards. However the heightened scrutiny placed on boards together with the limit on board positions is expected to push up director fees. This year board chairs earned €113,870 in actual fees at the median and other directors earned €75,610 in actual fees at the median. The Netherlands has the lowest pay differential between board chair and other director fees in our European sample: The board chair typically earns 1.34 times the amount of other directors, showing no change on last year.

©2014 Hay Group. All rights reserved

In 2012 the Netherlands enforced a Bill on management and supervision which includes provisions on gender parity at board and management levels. This bill came into effect as of 1st January 2013.

Specifically, it states that companies should endeavour to fill at least 30 per cent of board positions with women. This provision is non-binding and there are no formal penalties for non-compliance, though companies are required to explain why they fall short of this target in their annual reports.

On average 22 per cent of board positions are filled by women directors. However, improvement has been made with regards to the gender pay gap, which stands this year at two per cent at the median (from eight per cent over the last two years).

Dutch directors are on the whole the oldest in Europe, aged at 62 at the median (no change on last year).

Element

Median Fees

Companies

Policy fee and structure prevalance Non-executive chair basic fee

€ 80,000

15

Non-executive director basic fee

€ 50,000

17

Additional* fee for deputy chair

€ 10,000

11

Additional* fee for audit committee chair

€ 12,750

14

Additional* fee for audit committee members

€ 9,000

14

Additional* fee for remuneration committee chair

€ 10,000

14

Additional* fee for remuneration committee members

€ 7,250

14

Non-executive chairman total fee

€ 113,870

16

Average non-executive director total fee

€ 75,610

20

Actual fee received

* In addition to non-executive director basic fee

Typical non-executive director profile in The Netherlands Age:

62

Gender:

Male in 78 per cent of instances

Nationality:

Dutch in 44 per cent of instances

Most significant work experience:

Gained within Netherlands in 47 per cent of instances

37

36 Non–executive directors in Europe

higher for participating in the audit committee than the remuneration committee: Audit chairs earn €19,740 while their remuneration counterparts earn €12,370 at the median; and members of the audit committee earn €10,900 with their remuneration committee counterparts earning €8,780 at the median.

Juhani Ruuskanen +358 9 4133 6600 juhani.ruuskanen@haygroup.com

Norway Norwegian boards are comparatively small and typically consist of seven directors who meet 12 times throughout the year. Norwegian companies tend only to operate two committees (71 per cent of the sample), while some companies only have one sub-committee of the board.

Norwegian law requires all companies employing over 200 employees to have employee representation on the board. Employee representatives have the same powers and rights as other directors and often also sit on the audit and remuneration committees.

All companies in the sample have committees which cover audit, and 83 per cent have committees for remuneration. Audit committees met seven times and remuneration committees met six times at the median. Only one company in the sample runs a separate risk committee and nomination is a duty carried out by an external committee separate from the board.

It is common for the board chair to also chair the remuneration committee, which occurs in 50 per cent of our sample.

Boards are declared to be 79 per cent independent at the median, with both the audit and remuneration committee being fully independent at the median.

Norwegian directors earn modestly when compared to the greater European sample, ranking second lowest in Europe after Austria. The pay differential between board chair and other directors is down on last year and now stands at 1.69 at the median (from 1.89 last year).

In terms of actual pay board chairs took home €90,150 at the median, while other directors earned just €55,580 at the median. Norway is one of two countries where the constant sample showed a year-on-year median increase, which was three per cent for chairs and four per cent for other directors.

Director pay in Norway tends to be based on a basic annual fee and a committee retainer fee, and these fees tend to be delivered in cash. Only one company in the sample part pays in equity. Few Norwegian companies pay for meeting attendance. At the median the policy is to pay board chairs a fee of €64,100 and other directors earn €39,740 in basic pay. Committee retainer fees are noticeably

©2014 Hay Group. All rights reserved

Gender diversity in Norway has long been strong. Norway was the first country to introduce a quota for female directors in 2003, setting target levels of 40 per cent and imposing strong penalties for non-compliance. This year’s figures show that, on average, Norwegian companies are comprised of 61.5 per cent male directors and 38.5 per cent female directors. Gender figures for the audit committee are even higher, where an average of 53 per cent of seats are filled by women.

Younger women are being appointed to the board as a result of the gender quota. As such, there is an evident age gap between genders in the boardroom, with women aged at 52.5 and men at 60.5 at the median.

Diversity in terms of background experience and nationality is also strong but not as striking as gender diversity. This year an average of 56 per cent of directors have gained their principal work experience in Norway, 26 per cent from within other European countries and 18 per cent from outside European boarders. Similarly 61 per cent of directors are from Norway, 28 per cent are from other European countries and 11 per cent are non-Europeans. There is a requirement for the board chair plus 50 per cent of other directors to be living in Norway.

Element

Median Fees (€)

Median Fees

Companies

(NOK)

Policy fee and structure prevalance Non-executive chairman basic fee

€ 64,100

NOK 500,000

13

Non-executive director basic fee

€ 39,740

NOK 310,000

15

Additional* fee for deputy chairman

€ 10,580

NOK 82,500

13

Additional* fee for audit committee chairman

€ 19,740

NOK 154,000

11

Additional* fee for audit committee members

€ 10,900

NOK 85,000

12

Additional* fee for remuneration committee chairman

€ 12,370

NOK 96,500

8

Additional* fee for remuneration committee members

€ 8,780

NOK 68,500

8

Actual fee received Non-executive chairman total fee

€ 90,150

NOK 703,190

18

Average non-executive director total fee

€ 55,580

NOK 433,500

21

* In addition to non-executive director basic fee

Typical non-executive director profile in Norway Age:

57

Gender:

Male in 62 per cent of instances

Nationality:

Norwegian in 61 per cent of instances

Most significant work experience:

Gained within Norway in 56 per cent of instances

39

38 Non–executive directors in Europe

The Spanish Securities Commission (CNMV) has asked IBEX 35 companies to apply a discount to policy fees to reflect both company financial performance and the conditions of the Spanish economy. Directors’ fees in banks that receive state support are not allowed to exceed €100,000 per year, which is further restricted to €50,000 where the state has become the major shareholder as a result of significant financial aid.

No improvement has been seen around gender diversity in Spanish companies. On average 84 per cent of board positions continue to be filled by male directors. However, more positively, the gender pay gap in Spain is 1 per cent at the median (last year there was no gap).

Sergio Perez +34 93 209 27 44 sergio.perez@haygroup.com

In terms of nationality, the average board composition is made up as follows: 61 per cent of directors are of Spanish nationality, 17 per cent are of other European nationality and 22 per cent are from outside Europe.

Spain The vast majority of Spanish companies operate a unitary board, as is the case with all companies in our sample. At the median there are 13 directors serving on the board who meet a total of 16 times per year.

Spanish boards typically run three committees. All companies in the sample have committees for audit and remuneration, 90 per cent have a nomination committee and 23 per cent have a risk committee. At the median Spanish boards meet 12 times per year, audit committees meet eight times, and the remuneration and nomination committees meet seven times.

Spanish boards have declared themselves 56 per cent independent, with audit and remuneration committee being 67 per cent independent at the median. Spain is highly competitive in terms of director fees, and follows Switzerland in terms of the highest earning directors. However in recent years actual fees earned by directors have been declining. This year Spanish directors earned €121,230 at the median average (down from €139,860 last year). The vast majority of Spanish companies have an executive chair, hence we do not report on non-executive chair data in this analysis as the sample is too small to draw a median figure.

In terms of pay policy levels, directors in Spain have seen the median basic fee grow to €85,000 (from €75,000 last year). The median fees earned for chairing and participating in the audit committee have also noticeably increased, and now stand at €58,950 for audit chairs (from €42,500 last year) and €38,950 for audit members (up from €27,950 last year). Remuneration committee chairs and members have also experienced increases, if not as dramatic, in their median committee fees: €43,520 (from €40,000 last year) for remuneration chairs and €28,950 (from €27,000 last year) for remuneration members.

Directors’ pay is usually built on a mix of basic and committee fees, on top of which some companies also pay meeting fees. Fees are almost always entirely paid in cash.

©2014 Hay Group. All rights reserved

Element

Median Fees

Companies

Policy fee and structure prevalance -

3

Non-executive director basic fee

€ 85,000

27

Additional* fee for audit committee chairman

€ 58,950

10

Additional* fee for audit committee members

€ 38,950

10

Audit committee meeting attendance fee

€ 1,500

5

Additional* fee for remuneration committee chairman

€ 43,520

10

Additional* fee for remuneration committee members

€ 28,950

10

€ 1,500

5

€ 121,230

22

Non-executive chairman basic fee

Remuneration committee meeting attendance fee Actual fee received Average non-executive director total fee * In addition to non-executive director basic fee

Typical non-executive director profile in Spain Gender

Male in 84 per cent of instances

Nationality

Spanish in 61 per cent of instances

41

40 Non–executive directors in Europe

Sweden continues to maintain good levels of gender diversity. On average 30 per cent of board positions are filled by female directors (up from 26 per cent last year). The gender pay gap has, however, widened to 3.3 per cent at the median average (up from 2 per cent last year).

Carl Sjostrom

Pierre Ottebratt

+44 20 7856 7066 carl.sjostrom@haygroup.com

+46 8 700 55 70 pierre.ottebratt@haygroup.com

The level of international work experience brought into Swedish companies by their directors has decreased slightly from last year. On average 64.5 per cent of directors have gained their main work experience within Sweden, 26 per cent from within Europe and 9.5 per cent have gained it from outside Europe. Diversity in terms of director nationality is also down on last year. This year on average 66 per cent of directors are from Sweden (up from 59 per cent last year), 24 per cent are from other European countries and 10 per cent are non-Europeans.

Sweden At the median there are nine directors serving on Swedish boards, who meet a total of 14 times during the year (board and committee meetings included). There are typically nine board meetings in a year.

It is typical for Swedish companies to only operate two committees. All companies in the sample have committees for audit, all but one also have a committee for remuneration and 15 per cent have a risk committee. Nomination is not an area which is undertaken by directors in Swedish companies, as practice is to have an external nominations committee, as is also the case in Norway. The audit committee meets most frequently, typically meeting six times a year and the remuneration committee meets four times during the year.

It is common practice for the board chair to also chair the remuneration committee.

This occurs in 72 per cent of our Swedish sample.

Employee representatives have long served on Swedish boards. They are elected by established Swedish Trade Unions, who also set their term of office. They have the same right to vote and essentially have the same standing as other board members in their remit. However they are not remunerated as other board members (rather they are paid as trade union representatives). Occasionally companies go further than informing employee representatives of the decisions made by the various committees by allowing employee representatives on the audit and remuneration committees, though this is rare.

Sweden is one of two countries where there has been movement in actual fees this year, with board chairs earning fees of €199,010 at the median (up from €194,870 last year) and other directors earning fees of €72,250 at the median average (up from €71,240 last year). Using a constant sample, the median increase for chairs was one per cent and for other directors three per cent. The pay differential between the two has been calculated at 2.7 at the median (down from 2.75 last year).

Director pay in Sweden is structured around a basic fee and a committee retainer fee.

At the median, board chairs earn a basic fee of €182,650 and other directors earn a median average of €60,690 (compared to last year’s figures of €176,370 and €57,450 respectively). Equity-based pay is uncommon, though it should be noted that a few companies pay participants in synthetic stock, otherwise all fees are in cash.

©2014 Hay Group. All rights reserved

Element

Median Fees (€)

Median Fees (SEK)

Companies

Policy fee and structure prevalance Non- executive chairman basic fee

€ 182,650

SEK 1,580,000

23

NED basic fee

€ 60,690

SEK 525,000

23

Additional* fee for deputy chairman

€ 28,900

SEK 250,000

9

Additional* fee for audit committee chairman

€ 20,490

SEK 177,240

22

Additional* fee for audit committee members

€ 14,160

SEK 122,500

22

Additional* fee for remuneration committee chairman

€ 12,720

SEK 110,000

20

Additional* fee for remuneration committee members

€ 10,640

SEK 92,000

21

Actual fee received Non- executive chairman total fee

€ 199,010

SEK 1,721,500

24

Average NEDs total fee

€ 72,250

SEK 625,000

25

* In addition to non-executive director basic fee

Typical non-executive director profile in Sweden Age

58

Gender

Male in 70 per cent of instances

Nationality

Swedish in 66 per cent of instances

Most significant work experience

Gained within Sweden in 65 per cent of instances

43

42 Non–executive directors in Europe

amount earned by all other directors at each company, is up on last year. Board chairs now earn 3.55 times the amount earned by other directors at the median (3.04 last year).

William Eggers

Nora Gruhle

+49 69 50 50 55 220 william.eggers@haygroup.com

+49 6 50 50 55 324 nora.gruhle@haygroup.com

Switzerland The majority of Swiss companies (65 per cent down from 72 per cent last year) operate a twotier board structure.

Swiss boards typically comprise of 12 directors who attend a total of 11 meetings per year (board and committee meetings included).

There is typically no employee representation at board level.

Swiss companies typically operate four committees. All companies in the Swiss sample have committees which cover audit and remuneration, 75 per cent have a nomination committees and almost a third of companies have a separate risk committee.

one board chair also chairs the remuneration committee. However, it is not uncommon for the deputy chair to also chair a committee: in 35 per cent of cases the deputy chair also chairs the remuneration committee.

Despite director fees in Switzerland continuing to far exceed those in the rest of Europe, board chairs in Switzerland have seen their actual fees decrease. The median actual fees this year are €760,070 (€829,630 last year). This is a notable decrease from 2012 when the actual fees received by board chairs exceeded €1 million. Similarly actual fees for other directors have decreased from last year, with directors now earning a median average of €230,630 (€273,110 last year).

Over the course of the last year, Swiss boards met eight times at the median, audit committees met five times, remuneration and nomination committees met four times and the risk committees met six times.

Policy pay does not show much change on last year’s reported figures. Board chairs continue to earn €886,980 (or 1.091,660 CHF) at the median.

However, the basic pay for other directors has decreased slightly to €197,440 (or 243,000 CHF) from €207,400 (or 250,000 CHF) last year.

Year-on-year change, which looks at a consistent sample of companies, shows no change.

In 2014 new amendments to the Swiss Code of Best Practice for Corporate Governance were published. In addition to the existing recommendations, the new Swiss Code recommends an appropriate diversity (see below) as well as assurance that independent decision-making processes are in place through the exchange of ideas with executive management. Until now, the Swiss Code only lay down recommendations on the independence of committee members rather than the board in general.

In terms of fee structure, director pay in Switzerland typically consists of a basic fee plus a committee retainer. Meeting fees have become fairly uncommon and are only provided by three companies in the sample. The committee retainer fee for participating in the remuneration committee has now caught up with that of the audit committee, both standing at €24,380 at the median. However the audit chair continues to out-earn the remuneration committee chair in terms of committee fees, earning €46,720 against €32,500 at the median respectively.

It is uncommon for the board chair to also chair a committee in Switzerland: Two board chairs in the sample also chair the audit committee and

The pay differential between board chairs and other directors, which compares the actual fees obtained by board chairs with the average

©2014 Hay Group. All rights reserved

It is not uncommon for directors to receive their fees both in cash and share grants, and this occurs in 43 per cent of the sample. The equity granted is typically, but not always, smaller than the cash component. Few companies reward stock options as this would be seen to compromise director independence. Critics fear that variable payments of any form reduce the independence and might influence directors to make decisions with conflict with the long-term sustainable growth of the company.

Directors in Switzerland continue to bring large amounts of international work experience with them to the board room. This has been a ‘natural’ development rather than brought about by any regulatory requirements. The Swiss Code recommends that the Board of Directors should include members with long-serving international experience if a significant part of the company’s operations is abroad. Our figures show that geographical span of work experience to be very strong. Switzerland continues to recruit

Element

the lowest proportion of directors whose main work experience has been obtained locally: On average 29 per cent of directors have gained the majority of their work experience in Switzerland, 40 per cent have gained it from the rest of Europe and 31 per cent from outside of Europe.

Similarly Switzerland has the lowest percentage of directors of local nationality: on average 41 per cent of directors are Swiss, 34 per cent are Europeans of other nationality and 25 per cent are from outside Europe.

Switzerland does not, however, boast such strong diversity figures in terms of gender. There continues to be a shortfall of women directors.

At present, Switzerland has no fixed or statutory regulated quota on gender diversity. However, a recent decision has been made by the Swiss Cabinet in 2013 which will introduce a target rate for women occupying 30 per cent of board positions in companies with close links to the Swiss government (such as the Post Office, Swisscom and Swiss Broadcasting Corporation), to be implemented by 2020. Currently, on average, 83.5 per cent of directors are male and 16.5 per cent are female (which compares to 85 per cent male and 15 per cent female last year).

Median Fees (€)

Median Fees (CHF)

Companies

Policy fee and structure prevalance Non-executive chairman basic fee

€ 886,980

CHF 1,091,660

11

Non-executive director basic fee

€ 197,440

CHF 243,000

12

Additional* fee for deputy chairman

€ 109,690

CHF 135,000

7

Additional* fee for audit committee chairman

€ 46,720

CHF 57,500

12

Additional* fee for audit committee members

€ 24,380

CHF 30,000

11

Additional* fee for remuneration committee chairman

€ 32,500

CHF 40,000

11

Additional* fee for remuneration committee members

€ 24,380

CHF 30,000

10

Actual fee received Non-executive chairman total fee

€ 760,070

CHF 935,470

18

Average non-executive director total fee

€ 230,630

CHF 283,860

20

* In addition to non-executive director basic fee

Typical non-executive director profile in Switzerland Gender:

Male in 84 per cent of instances

Nationality:

Swiss in 41 per cent of instances

Most significant work experience:

Gained within Switzerland in 29 per cent of instances

45

44 Non–executive directors in Europe

In terms of actual fees, directors in the FTSE 100 now earn median average fees of €93,620 with board chairs earning €431,040 at the median. The pay differential between the actual fees board chairs versus the average earned by other directors is the highest in Europe with board chairs earning 4.50 times the amount earned by other directors at the median.

Simon Garrett +44 20 7856 7113 simon.garrett@haygroup.com

United Kingdom

Director diversity in the UK boardroom continues to grow as companies strive for board diversity.

Women on boards continue to attract most attention. As yet there are no legal quotas in place, however the current coalition government has threatened to resort to quotas if 25 per cent of board positions are not filled by women by 2015. It is common for companies to introduce their own internal targets with regards to gender diversity. Some companies have chosen to state such targets in their annual reports and disclose whether these targets have been met. This year there are 76 per cent male directors at the median average (down from 80 per cent last year) in UK companies.

International diversity is also on the rise. This year’s figures show that an average of 53 per cent have gained the bulk of their work experience within the UK (58 per cent last year), 32.5 per cent from outside the Europe (31 per cent last year) and 14.5 per cent from within Europe (11 per cent last year).

When looking at director nationality an average of 57 per cent are British, 29 per cent are from other European countries and 13 per cent are non-Europeans.

British companies typically operate a unitary board where both non-executive and executive directors sit alongside each other. The UK Code of Corporate Governance states that at least half the board should be independent, including all members of the audit and remuneration committees.

Employee representatives are not typically seen on boards. Despite this, under the new Director’s Reporting Regulations which became effective this year, companies are asked to disclose whether employees have been consulted during the review of executive remuneration. However, many companies choose not to include this and the consultation process itself is not a requirement.

The median number of directors per company in the FTSE 100 (surveyed here) remains at eight this year. Directors in the UK typically meet at eight board meetings in the year.

Element

Median Fees

Median Fees (GBP)

Companies

Policy fee and structure prevalance Non-executive chairman basic fee

€ 429,860

£365,000

90

The UK Corporate Governance Code requires the board to have three committees: audit, remuneration and nomination. In addition 18 per cent of the sample also have a separate risk committee. The audit and remuneration committees typically meet five times a year and the nomination and risk committees typically meet four times over the year.

Non-executive director basic fee

€ 76,550

£65,000

95

Additional* fee for deputy chairman

€ 23,550

£20,000

77

Additional* fee for audit committee chairman

€ 23,550

£20,000

90

Board chairs seldom take on the added responsibility of chairing any of the major committees as it is considered to go against best practice. This year only two board chairs also chaired the remuneration committee and only one chaired the risk committee. Under no circumstances does the board chair also chair the audit committee.

Additional* fee for audit committee members

€ 17,380

£14,760

46

Additional* fee for remuneration committee chairman

€ 23,550

£20,000

89

Additional* fee for remuneration committee members

€ 12,950

£11,000

45

Additional* fee for risk committee chairman

€ 35,330

£30,000

15

Additional* fee for risk committee members

€ 14,130

£12,000

13

Policy pay tends to be made up of a basic fee and a committee retainer fee where applicable.

Seldom do UK companies pay on a meeting attendance basis. The fee for the board chair is typically an all-encompassing one with no added premia for any additional responsibilities taken on. The basic policy fees for board chairs is €429,860 at the median and other directors is €76,550 at the median average. The committee retainer fee for remuneration chair now matches that for audit chair, both earning €23,550 at the median (€23,550 is also the same fee added onto the position of deputy chair/senior independent director). However committee fees for membership in the remuneration committee lags behind that of the audit committee, with the former earning just €12,950 while the latter earns €17,380 at the median.

The UK Code includes a specific provision discouraging companies from including share options or other forms of performance-related elements as part of director fee arrangements. In exceptional cases where equity is granted, companies need to gain shareholder approval prior to exercise and the acquired shares should be held at least a year following the director’s departure from the board.

Our figures show that the vast majority of directors receive all fees in cash, with only six per cent of the sample part paying fees in shares.

©2014 Hay Group. All rights reserved

Additional fee for risk committee members Non-executive chairman total fee

€ 431,040

£366,000

88

Average non-executive director total fee

€ 93,620

£79,420

99

* In addition to non-executive director basic fee

Typical non-executive director profile in the United Kingdom Age:

60

Gender:

Male in 76% of instances

Nationality:

British in 57% of instances

Most significant work experience:

Gained within UK in 53% of instances

47

46 Non–executive directors in Europe

Putting into perspective: Non-Executive Director fees in the United States

Mirroring the executive pay trend, director compensation programs have increasingly moved toward full-value awards (restricted shares or common stock) to deliver equity-based pay with the use of stock options becoming a less prevalent practice. The prevalent vesting schedule of equity awards remains at one year or less which serves to align the vesting term with the directors’ annual service.

Tony Wu

Bryan Kligman

+1 201 557 8431 tony.wu@haygroup.com

+1 201 557 8441 bryan.kligman@haygroup.com

United States In the US, legislative and regulatory reforms in the past decade (namely the Sarbanes-Oxley Act of 2002, and more recently, the Dodd-Frank legislation) have resulted in an expansion of the duties and responsibilities for non-executive directors at publicly-traded companies. Factors such as increased time commitments, potential exposure to liability and a reduced pool of candidates with the necessary levels of independence, experience and expertise, all have contributed to the continued growth of directors’ total compensation, albeit at a slower rate than in the mid-2000’s.

US director pay levels increased four to six 6 per cent from 2012 across companies of all sizes.

The modest pace of director pay growth persists despite a strong economic recovery. Companies remain hesitant to make major investments and pay changes in the face of turmoil in global markets and uncertainty around US legislation on healthcare and tax policy. We expect US director pay to continue to grow in the mid-single digit range as directors settle into the “say-on-pay” era and face new governance challenges.

We continue to see a strong link between directors’ pay and company size, with larger companies awarding higher cash retainers and total compensation to directors. While total compensation levels differ by company size and industry, the compensation package for directors at publiclytraded companies has traditionally included the following elements: annual cash retainer, board meeting fees, equity compensation, committee chair cash retainers, committee member pay (typically either meeting fees or committee member retainers), lead independent director or non-executive chairman premium pay and benefits/perquisites (e.g., supplemental insurance and matching charitable gifts).

In terms of director pay program changes, companies continue to adopt formalised director stock ownership policies which require directors to accumulate and hold a fixed level of equity throughout their tenure. These ownership policies are often expressed as a multiple of annual cash retainer and meaningful levels typically range from 3x to 5x. Companies are also permitting directors to elect to receive additional equity awards in lieu of cash retainers/fees (often through a long-term cash deferral program), which helps directors to achieve their stock ownership guidelines and further strengthens the alignment between director and shareholder interests.

Among larger public companies, we continue to see the combined CEO and chairman as the prevalent board leadership role. However, more companies are appointing a lead independent director to assist the chairman and preside over meetings of independent directors which are required by the Sarbanes Oxley Act. Lead directors typically receive premium pay above and beyond that of standard board members. Of the 300 public companies surveyed in Hay Group’s 2014 annual director compensation study, 60.7 percent paid lead directors a median additional fee of $25,000 which is consistent with prior years but lower than the pay premium provided to non-executive chairmen.

Below are median director compensation statistics taken from the 2014 Hay Group 300 Director Compensation and Benefits Survey. We note that audit committee chairs continue to receive the highest compensation, followed by remuneration committee chairs. At the committee member level, we observed a narrower pay gap between audit and remuneration committee members (the median audit committee meeting fee is slightly higher than that of other committee members, while the median remuneration committee member retainer is equal to that of the audit members), reflecting the significance of the remuneration committee’s role in today’s executive pay environment. Nominating/governance committee members typically receive lower pay than audit and remuneration committee members.

Element

Median Fees Policy fee and structure prevalance

Non-executive director basic fee

$233,500

Board meeting attendance fee

$2,000

Additional* fee for audit committee chairman

$20,000

As part of its 2014 annual compensation study, Hay Group analysed director pay and benefits of the largest 300 US public companies to file a definitive proxy statement for fiscal year 2013.

The median annual cash retainer for directors of these firms was $85,000. While median total equity granted was $130,000. Assuming the typical director is a non-chair member of the audit and remuneration committees, median total director compensation was $248,000. In terms of board composition, the majority of directors of public firms serve one-year terms. Regarding board independence, both the NYSE and NASDAQ exchanges require that public boards be comprised of a majority of independent directors. Given this requirement, it is not uncommon for public companies to have independent directors comprising 75 per cent or more of the board.

Additional* fee for audit committee members

$10,000

Audit committee meeting attendance fee

$2,000

Additional* fee for remuneration committee chairman

$15,000

Additional* fee for remuneration committee members

$10,000

Remuneration committee meeting attendance fee

$1,750

Additional* fee for nomination/ governance committee chairman

$15,000

Additional* fee for nomination/ governance committee members

$7,750

Over the past few years we have observed several trends in the structure and delivery of director pay. Companies continue to eliminate director meeting fees, shifting that value to retainers at both the board and committee level. This results in a simplified compensation structure (i.e. no need to define what constitutes and official ‘meeting’ for fee payment purposes) and compensates directors for board and committee work conducted outside of formal meetings.

Nomination/ governance committee meeting attendance fee

$1,500

Additional* fee for nomination/ governance committee members

Nomination/ governance committee meeting attendance fee Non-executive chairman total fee Average non-executive director total fee

©2014 Hay Group. All rights reserved

$248,000

49

48 Non–executive directors in Europe

Sample

Policy fees

This study examined disclosures covering non-executive directors at 376 companies in 12 countries across Europe. A full list of these companies is provided at the end of the report. These companies represent the constituents of the major investment index for each country and all data has been collected from publicly filed sources, most commonly the annual report.

Policy fees represent the disclosed fee paid to each specific role on the board. We have examined the following elements to policy fees.

Data collected

Methodology

Our data collection focused on the remuneration levels paid to non-executive directors elected by general meeting for services on the supervisory board and its committees. Throughout the report we differentiate between board chairs and all other non-executive directors. We did not collect information about any management board members for companies who have a two-tier board structure and data on employee representatives are excluded. The data collected represents the policy amount that the company intends to pay each director for specific services rendered, as well as an aggregate total amount paid to each individual for the prior year’s service.

In our charts and tables we have only included countries where there has been a sufficient sample size to provide an accurate picture.

We did not include data on directors who left mid-year. We did, however, include diversity data on new joiners to the board who joined mid-year while excluding them from the actual pay calculations.

©2014 Hay Group. All rights reserved

Basic fee – this is the fee paid for service on the supervisory board and can include a fixed retainer fee or a variable (often profit share-based) component. The amount paid to the chair of the board is collected independently of the amount paid to regular members of the board.

Committee retainer – this is the fee paid for service on a committee of the supervisory board. We have differentiated between the fee paid for chairing a committee versus and that paid for being a member of the committee.

Meeting fees – where applicable we have collected the policy for fees paid for meeting attendance. We have collected these on a per meeting basis for both board and committee meetings separately as well as chair versus members meeting fees.

Actual pay Actual pay has been collected as the value awarded to each individual for service on the supervisory board, as disclosed by the company in the annual report. This value will include payments for service on the board as well as any applicable committee retainers, meeting fees or variable pay awarded. Typically, this figure is disclosed as an aggregate value and we are therefore not able to break it out into the same categorisation as the policy figures.

51

50 Non–executive directors in Europe

Sector classification

Statistics

Sectors have been categorised according to Hay Group’s global sector classification model. We have replaced the financial services sector with individual sectors for banks, insurers and other financial companies. Automotive, Transport and Technology normally form part of the industrials super-sector but we have chosen to categorise them separately due to varied pay practice within these sub-sectors.

This report focuses on median values so as to minimise the effect of outliers in the data. Throughout the report we also refer to median average figures. When calculating the actual pay data, our approach was to calculate the average pay amongst the individuals at a company and then report on the median of those averages for country level statistics. A minimum of five data points were required for us to provide a median figure for a country or for Europe.

Sector

Includes

Automotive

n

Automobiles & parts

Banks

n

Banks

Communications

n

Media Fixed-line telecommunications Mobile telecommunications

n n

Consumer Goods

n n n n

Consumer Services

n n n n

Health and Life Sciences

n

Industrials

n

n

n n n n n

Insurance

n n

Natural Materials

n n n n

Oil & Gas

n n

Other financials

n n n

Technology

Beverages Leisure Goods Personal Goods Tobacco Food & drug retailers General retailers Household goods & home construction Travel & leisure Pharmaceuticals & biotechnology Medical care equiptment & services Construction & materials Food producers General industrials Industrial engineering Industrial transportation Support services Life insurance Non-life insurance Mining Chemicals Forestry & paper Industrial metals & mining Oil & gas producers Oil equiptment, services & distribution Financial services Real estate investment trusts Real estate investment & services

n

Aerospace & defense Electronic & electrical equiptment Hardware & equitment Software & computer services

Transport

n

Industrial Transportation

Utilities

n

Alternative energy Electricity Gas, water & multiutilities

n n n

n n

©2014 Hay Group. All rights reserved

Sample Company

Market cap. (€ million)

Company

AUSTRIA

Market cap. (€ million) BELGIUM

Andritz AG

4,731

Ackermans & van Haaren NV

2,822

CA Immobilien Anlagen AG

1,132

Ageas

7,008

Conwert Immobilien Invest SE

772

Anheuser-Busch InBev NV

124,222

Erste Group Bank AG

10,514

Befimmo SA

1,113

EVN AG

2,010

Belgacom SA

7,269

IMMOFINANZ AG

3,155

Cofinimmo

1,583

Lenzing AG

1,105

Colruyt SA

6,349

Mayr Melnhof Karton AG

1,799

Delhaize Group SA

4,426

Oesterreichische Post AG

2,349

Delta Lloyd NV

3,460

Foreign exchange

OMV AG

11,350

D'ieteren SA/NV

2,002

All values have been represented in Euros (€). For values which were disclosed in a currency other than Euros we have converted these values using the period average exchange rate for 2013.

Raiffeisen Bank International AG

4,995

Elia System Operator SA/NV

2,041

RHI AG

Market Capitalisation Historical market capitalisation data for the most recent period end (2013) is listed in Euros (€) and has been extracted from Bloomberg L.P.

Diversity All diversity figures including age, gender, nationality and work experience have been sourced from annual reports, company’s websites and Bloomberg. The data has been interpreted by Hay Group.

898

Groupe Bruxelles Lambert SA

10,346

Schoeller-Bleckmann Oilfield Equipment A

1,282

KBC Groep NV

17,216

Strabag SE

2,430

NV Bekaert SA

1,545

Telekom Austria AG

2,436

Solvay SA

9,741

Verbund AG

5,390

Telenet Group Holding NV

5,019

Vienna Insurance

4,637

ThromboGenics NV

Voestalpine AG

4,129

UCB SA

9,706

Wienerberger AG

1,354

Umicore SA

4,075

Zumtobel AG

367

727

53

52 Non–executive directors in Europe

Company

Market cap. (€ million)

Company

FINLAND

Market cap. (€ million)

Company

FRANCE

Market cap. (€ million)

Company

GERMANY

Market cap. (€ million) ITALY

Amer Sports Oyj

1,777

Accor SA

7,822

Adidas AG

19,382

Ansaldo STS SpA

1,413

Cargotec Oyj

1,742

Air Liquide SA

32,159

Allianz SE

59,145

Assicurazioni Generali SpA

26,615

Elisa OYJ

3,069

Airbus Group NV

43,550

BASF SE

71,173

Atlantia SpA

13,259

Fortum OYJ

14,774

Alcatel-Lucent

9,150

Bayer AG

84,307

Azimut

2,628

Huhtamaki OYJ

1,928

Alstom SA

9,784

Bayerische Motoren Werke AG

55,926

Banca Monte dei Paschi di Siena SpA

2,049

Kemira OYJ

1,849

AXA SA

48,784

Beiersdorf AG

16,703

Banca Popolare dell'Emilia Romagna

2,314

Kesko OYJ

2,661

BNP Paribas SA

70,310

Commerzbank AG

13,332

Banca Popolare di Milano

1,453

Kone OYJ

16,816

Bouygues SA

8,754

Continental AG

31,881

Banco Popolare

2,456

Konecranes OYJ

1,495

Cap Gemini SA

7,876

Daimler AG

67,290

Buzzi Unicem SpA

2,168

Metso OYJ

4,649

Carrefour SA

20,858

Deutsche Bank AG

35,345

CNH Industrial NV

11,113

Neste Oil OYJ

3,678

Cie de St-Gobain

22,193

Deutsche Boerse AG

11,084

Davide Campari-Milano SpA

3,500

Nokia OYJ

21,417

Cie Generale des Etablissements Michelin

14,350

Deutsche Lufthansa AG

7,110

Enel SpA

29,846

Nokian Renkaat OYJ

4,648

Credit Agricole SA

23,221

Deutsche Post AG

32,039

Eni SpA

63,363

Danone SA

33,015

Deutsche Telekom AG

55,266

Exor SpA

6,428

Outokumpu OYJ

845

Outotec OYJ

1,362

Essilor International SA

16,248

E.ON SE

25,593

Fiat SpA

7,435

Pohjola Bank PLC

4,672

GDF Suez

40,349

HeidelbergCement AG

10,341

Finmeccanica SpA

3,183

Rautaruukki OYJ

927

Gemalto NV

6,903

Infineon Technologies AG

7,955

Gtech Spa

3,856

Sampo

19,975

Kering

19,395

K+S AG

4,283

Intesa Sanpaolo SpA

29,495

Stora Enso OYJ

5,753

Lafarge SA

15,652

LANXESS AG

4,033

Luxottica Group SpA

18,439

UPM-Kymmene OYJ

6,497

Legrand SA

10,640

Linde AG

28,219

Mediaset SpA

3,916

Wartsila OYJ Abp

7,055

L'Oreal SA

76,594

Muenchener Rueckversicherungs AG

28,721

Mediobanca SpA

3,376

YIT OYJ

1,274

LVMH Moet Hennessy Louis Vuitton SA

67,333

RWE AG

16,224

Mediolanum SpA

4,640

Orange SA

23,630

SAP AG

74,367

Pirelli & C. SpA

5,975

Pernod Ricard SA

22,611

Siemens AG

75,103

Saipem SpA

6,836

Publicis Groupe SA

13,740

ThyssenKrupp AG

9,109

Salvatore Ferragamo SpA

4,657

Renault SA

17,285

Volkswagen AG

91,605

Snam SpA

13,743

Safran SA

21,035

STMicroelectronics NV

5,147

Schneider Electric SA

35,628

Tenaris SA

18,762

Societe Generale SA

32,771

Terna Rete Elettrica Nazionale SpA

7,300

Technip SA

7,942

Tod's SpA

3,716

©2014 Hay Group. All rights reserved

Total SA

101,015

UniCredit SpA

31,159

Unibail-Rodamco SE

17,967

World Duty Free SpA

2,326

Vallourec SA

5,075

Yoox SpA

1,913

Veolia Environnement SA

6,507

Vinci SA

28,713

Vivendi SA

25,660

55

54 Non–executive directors in Europe

Company

Market cap. (€ million)

Company

NETHERLANDS

Market cap. (€ million)

Company

NORWAY

Market cap. (€ million)

Company

SPAIN

Market cap. (€ million)

SWEDEN

Aegon NV

14,424

Aker Solutions ASA

1,921

Abertis Infraestructuras SA

13,817

Alfa Laval AB

7,811

Ahold NV/Koninklijke

12,822

Det Norske Oljeselskap ASA

1,123

ACS Actividades de Construccion y Servic

7,873

Assa Abloy AB-B

14,222

Air France-KLM

2,277

DNB ASA

21,141

Amadeus IT Holding SA

13,922

Atlas Copco AB-A SHS

24,420

Akzo Nobel NV

13,668

DNO International ASA

2,925

Banco Bilbao Vizcaya Argentaria SA

51,711

Boliden AB

3,039

ArcelorMittal

21,447

Fred Olsen Energy ASA

1,957

Banco de Sabadell SA

7,548

Electrolux AB-Ser B

5,443

ASML Holding NV

29,996

Gjensidige Forsikring ASA

6,920

Banco Popular Espanol SA

8,237

Ericsson LM-B SHS

28,625

Corio NV

3,202

Golden Ocean Group Ltd

776

Banco Santander SA

73,732

Getinge AB-B SHS

5,917

DSM NV/Koninklijke

9,944

Marine Harvest ASA

3,625

Bankia SA

14,212

Hennes & Mauritz AB-B SHS

51,622

Fugro NV

3,663

Norsk Hydro ASA

6,602

Bankinter SA

4,466

Investor AB-B SHS

19,003

Heineken NV

28,270

Norwegian Air Shuttle AS

Bolsas y Mercados Espanoles SA

2,313

Lundin Petroleum AB

4,386

ING Groep NV

38,753

Opera Software ASA

1,310

CaixaBank SA

19,036

Modern Times Group-B SHS

2,505

KPN NV/Koninklijke

10,005

Orkla ASA

5,740

Distribuidora Internacional de Alimentac

4,194

Nordea Bank AB

39,440

Philips NV/Koninklijke

24,336

Petroleum Geo-Services ASA

1,835

Ebro Foods SA

2,621

Sandvik AB

12,840

PostNL NV

1,826

Prosafe SE

1,319

Enagas SA

4,535

Scania AB-B SHS

11,367

Randstad Holding NV

8,353

REC Silicon ASA

4,090

Fomento de Construcciones y Contratas SA

2,059

Securitas AB-B SHS

2,816

Royal Caribbean Cruises Ltd

7,582

Gamesa Corp Tecnologica SA

1,901

Skandinaviska Enskilda Ban-A

20,861

792

Royal Imtech NV

951

SBM Offshore NV

3,089

Schibsted ASA

5,152

Gas Natural SDG SA

18,708

Skanska AB-B SHS

6,099

TNT Express NV

3,677

Seadrill Ltd

13,864

Grifols SA

11,838

Skf AB-B Shares

8,670

Wolters Kluwer NV

6,126

Statoil ASA

55,903

Iberdrola SA

28,752

Ssab AB-A Shares

1,802

Ziggo NV

6,640

Storebrand ASA

2,028

Inditex SA

64,328

Svenska Cellulosa AB-B SHS

15,694

Subsea 7 SA

4,649

Indra Sistemas SA

1,995

Svenska Handelsbanken A SHS

22,669

Telenor ASA

26,235

Jazztel PLC

1,969

Swedbank AB-A Shares

22,417

TGS Nopec Geophysical Co ASA

1,960

Mapfre SA

9,587

Swedish Match AB

4,643

Yara International ASA

8,696

Mediaset Espana Comunicacion SA

3,413

Tele2 AB-B SHS

3,663

Obrascon Huarte Lain SA

2,937

Teliasonera AB

26,169

Red Electrica Corp SA

6,559

Volvo AB-B SHS

19,330

Repsol SA

23,861

Sacyr SA

1,755

Tecnicas Reunidas SA

2,122

Telefonica SA

53,861

Viscofan SA

1,927

©2014 Hay Group. All rights reserved

57

56 Non–executive directors in Europe

Company

Market cap. (€ million)

Company

SWITZERLAND

Market cap. (€ million)

Company

UK

Market cap. (€ million)

Company

UK

ABB Ltd

44,142

3i Group plc

3,521

HSBC Holdings plc

Actelion Ltd

7,396

Aberdeen Asset Management PLC

5,430

IMI plc

Adecco SA

10,269

Admiral Group plc

4,346

Cie Financiere Richemont SA

33,871

AGGREKO PLC

Credit Suisse Group AG

35,408

Geberit AG

Market cap. (€ million) UK

149,850

Smith & Nephew PLC

9,234

6,248

Smiths Group PLC

6,235

Imperial Tobacco plc

26,511

Sports Direct International PLC

3,324

5,524

InterContinental Hotels Group PLC

6,031

SSE PLC

16,963

AMEC PLC

3,971

International Consolidated Airlines Grou

9,838

Standard Chartered PLC

39,655

8,298

Anglo American plc

22,109

Intertek Group PLC

6,103

Standard Life PLC

10,267

Givaudan SA

8,823

Antofagasta PLC

9,759

ITV plc

9,382

Tate & Lyle PLC

4,699

Holcim Ltd

17,736

ARM Holdings plc

18,489

J Sainsbury PLC

7,950

Tesco PLC

34,684

Julius Baer Group Ltd

7,628

Ashtead Group plc

3,492

Johnson Matthey PLC

5,587

The Sage Group PLC

4,395

Nestle SA

169,985

Associated British Foods plc

17,099

Kingfisher PLC

7,500

Travis Perkins PLC

5,472

Novartis AG

141,151

AstraZeneca

53,988

Land Securities Group PLC

7,773

TUI Travel PLC

4,917

Roche Holding AG

172,675

Aviva Plc

15,921

Legal & General Group PLC

15,831

Tullow Oil PLC

9,347

SGS SA

12,813

Babcock International Group PLC

4,669

Lloyds Banking Group plc

67,710

Unilever PLC

84,685

Swatch Group AG/The

26,133

BAE Systems plc

16,767

London Stock Exchange Group PLC

4,197

United Utilities Group PLC

5,727

Swiss Re AG

22,944

Barclays plc

52,644

Marks & Spencer Group PLC

7,461

Vodafone Group PLC

108,201

Swisscom AG

19,908

BG Group PLC

53,098

Meggitt PLC

5,051

Weir Group PLC/The

5,424

Syngenta AG

26,631

BHP Billiton PLC

112,141

Melrose Industries PLC

4,652

Whitbread PLC

5,651

Transocean Ltd

12,930

BP plc

109,286

Mondi PLC

6,102

William Hill PLC

4,187

UBS AG

52,035

British American Tobacco PLC

78,831

National Grid PLC

34,413

WM Morrison Supermarkets PLC

6,794

Zurich Insurance Group AG

31,174

British Land Co PLC

6,353

Next PLC

7,687

Wolseley PLC

9,867

British Sky Broadcasting Group PLC

14,740

Old Mutual PLC

11,125

WPP PLC

22,361

BT Group plc

26,861

Pearson PLC

13,188

Bunzl PLC

5,810

Persimmon PLC

4,535

Capita PLC

8,335

Petrofac Ltd

5,087

Carnival PLC

20,869

Prudential PLC

41,219

Centrica PLC

21,721

Randgold Resources Ltd

4,200

Coca-Cola HBC AG

7,783

Reckitt Benckiser Group PLC

41,448

Compass Group plc

18,338

Reed Elsevier plc

23,914

CRH plc

13,419

Rexam PLC

5,047

Diageo PLC

55,098

Rio Tinto

76,235

easyJet plc

6,068

Rolls-Royce Holdings plc

28,797

Experian PLC

13,342

Royal Bank of Scotland Group PLC

45,477

Fresnillo PLC

6,600

Royal Dutch Shell PLC

164,176

G4S PLC

4,893

Royal Mail PLC

6,827

GKN PLC

7,447

RSA Insurance Group PLC

4,043

GlaxoSmithKline plc

93,991

SABMiller plc

68,533

Glencore Xstrata PLC

49,295

Schroders plc

8,824

Hammerson PLC

4,293

Severn Trent PLC

4,837

Hargreaves Lansdown PLC

4,918

Shire PLC

20,013

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