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Technische Universität München

Further decrease in DAX executive pay


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Further decrease in DAX executive pay

Pay gap between top management and employees slightly narrowing

Earnings of management board members of companies listed on the DAX exchange were lower in 2019 for the second consecutive year. The average decrease this time was just 0.3 percent. However, this stands in contrast to the substantial upward trend over the past decade. This was revealed in the annual study by the Technical University of Munich (TUM) and DSW, an advocacy group for private investors, presented in Frankfurt today.

Management board members with companies listed on the German DAX exchange earned an average of 3.4 million euros in 2019, or 0.3 percent less than in 2018. That means that the average pay of these top executives decreased for the second consecutive year - which was not the case once in the previous decade. During that period, there was a clear upward trend.

Because gross wages increased by 2.6 percent in Germany in 2019, the gap between the earnings of board members and their employees narrowed a little further. When the 2018 and 2019 figures are combined, executive pay declined by 3.8 percent while nominal wages rose by 5.7 percent. Executive pay now exceeds that of rank-and-file staff by a factor of 49, as compared to a multiple of 52 previously.

Decrease in profit-linked bonuses

The lower payouts to board members reflects a 3.5 percent decrease in bonuses (variable cash compensation), which depend primarily on companies' profits. The earnings of DAX companies were down 15 percent in 2019. However, 22 of the 30 listed companies have also begun tying bonuses to non-financial factors such as sustainability targets.

There have been slight increases, too, in the agreed base salaries as well as payments linked to the long-term performance of a company's share price. The DAX index gained more than 25 percent in 2019. The three components each account for approximately one third of total compensation.

"Incentives for long-term perspective in crisis"

"In recent years, executive compensation has increasingly been geared to companies' long-term performance. That may prove very important in the current crisis, which is overshadowing every recession seen since the Second World War," says Prof. Gunther Friedl of the TUM Chair of Management Accounting, who headed the study. "The board members need to prepare their companies for an uncertain future. A good compensation system creates the right incentives for that kind of long-term outlook."

"The effects of the coronavirus crisis will be a real acid test for the true impact of compensation systems. It will become apparent whether they live up to the 'pay for performance' principle," says DSW Chief Managing Director Marc Tüngler: "We would take a dim view of any crisis-related adjustment to the performance targets leading to an upward correction in compensation. Nor do we believe that an increased weighting of fixed compensation is the right response to the coronavirus crisis. If companies are cancelling dividends and cutting employees' hours, executives have to make sacrifices, too."

Women in charge of executive areas with lower pay

Female board members had average earnings of 3 million euros and thus again lagged behind their male counterparts, who earned an average of 3.1 million euros, excluding CEOs. One reason for this is that female executives work more often for smaller companies and are assigned to areas that command less compensation. Following the departure of SAP Co-CEO Jennifer Morgan, it is again the case that not a single DAX company has a female CEO. Board members from other countries earned more than those from Germany in 2019 (3.6 million euros vs. 3.4 million euros).

VW CEO now the top earner

As in the previous year, Volkswagen board members earned the most. Despite a decrease of 8 percent, with average compensation of 5.7 million euros, they have a slight edge over their counterparts at Germany's most valuable company, SAP, who received 5.6 million euros. In third place is Merck, which paid an average of 5.5 million euros.

CEOs earned 5.3 million euros on average. After the departure of SAP CEO Bill McDermott, who was the highest-paid executive in 2018, Herbert Diess of Volkswagen, with 9.9 million euros, now holds that distinction. Merck CEO Stefan Oschmann, with 8.5 million euros, ranks second, ahead of Joe Kaeser of Siemens, who earned 7.2 million euros last year.


The study compares the 2019 figures of DAX-listed companies with the previous year including companies that were not yet listed on the index in that period. There was one change in the DAX in 2019.

The figures for Wirecard were not yet available.

More information:

All figures on executive pay and speeches at the press conference are available at: (German)

The Technical University of Munich (TUM) is one of Europe's leading research universities, with around 600 professors, 43,000 students, and 10,000 academic and non-academic staff. Its focus areas are the engineering sciences, natural sciences, life sciences and medicine, combined with economic and social sciences. TUM acts as an entrepreneurial university that promotes talents and creates value for society. In that it profits from having strong partners in science and industry. It is represented worldwide with the TUM Asia campus in Singapore as well as offices in Beijing, Brussels, Cairo, Mumbai, San Francisco, and São Paulo. Nobel Prize winners and inventors such as Rudolf Diesel, Carl von Linde, and Rudolf Mößbauer have done research at TUM. In 2006, 2012, and 2019 it won recognition as a German "Excellence University." In international rankings, TUM regularly places among the best universities in Germany.

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