Euro insurer CEO’s take avg. 10% pay raise; the bias is in the bonus
The CEOs of key European listed insurers walked with an average 10% hike in total compensation in 2022 after a 15% post-Covid rise the year prior, taking an average of 4.4 million in 2022, a study by Deutsche Bank of its equity market coverage universe has indicated.
The headline averages span a wide breadth of cases from a low of €1.1 million up to the €11.1 million being handed out at Generali and Zurich.
Large firms understandably pay more than their smaller rivals, but Generali, Zurich Munich Re and Aviva are called out for seeming "above average relative to peers" while Zurich, Allianz and General "also screen high" against their three-year history of total return for shareholders, DB analysts noted.
Variation is even greater when measured by the top-end of the potential opportunity defined by short- and long-term incentive plans, where Dutch insurers offer zilch and the less spendthrift offer more than six times base salary.
Hannover Re got a call-out amongst firms said to “pay modestly, but perform well,” and is called “least generous” relative to market cap. But Hannover Re also took mention for strong growth to cut that pay disparity in 2022.
Short-term incentives are 70% built on financial metrics and 30% other, chiefly customer-satisfaction and ESG-metrics.
The average achievement rate of short-term incentive targets relative to maximum fell by 10 points in 2022 to 71% and is now in line with the neighbourhood 70% readings from 2018-19.
SCOR and Swiss Re were downside call-outs below the 50% mark. Hannover Re leads the Big 4 European reinsurers with a 75% achievement rate, up seven pints year on year and the only Big 4 reinsurer now above their five-year average.
Long-term incentives are built 40% on shareholder return, 45% on financial targets and a mere 15% for non-financial metrics. ESG is now at 9% of the total, up a point from the prior year and 4 points over the past six years.
Achievement rates for those long-term performance metrics likely edged up in 2022 to 63% from an estimated 60% in the year prior with two thirds of the studied firms at or above the 50% mark.
Amongst the big-four reinsurers, Hannover Re and Munich Re lead the pack at points above their five-year averages. SCOR slid 7 percentage points to a five-year low. Swiss Re has struggled.
Mark Munich Re on the podium at over 90% achievement. Put Swiss Re on the list of firms nailing down less than 15%.
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