• Companies in the US pay highest base salaries and annual total cash for finance and marketing directors; those in India pay the lowest
   
• Finance directors are generally paid most, but marketing directors earn more in Germany, Poland, and Hungary
   
• Highest base pay for HR directors found in US, while their counterparts in Germany receive highest annual total cash
   
• Multinational organizations rely on global pay data for sourcing talent and determining work locations

Senior executives in the US earn the highest salaries and annual total cash* globally, according to a survey by Mercer Human Resource Consulting. The research, which covers pay for finance, marketing, and HR directors in 14 countries worldwide, found that finance and marketing directors earn more than five times their counterparts in India, while HR directors earn over three times as much.

[*Annual total cash refers to the total of annual base salary plus any guaranteed cash plus the actual annual short-term incentive amount.]

Steve Gross, Global Leader of Broad-based Rewards at Mercer said: “Salaries and annual total cash are generally higher in the US because there is greater competition for talent and employers must pay more for top employees.”

The research is part of Mercer’s 2006 Global Pay Summary, which provides base salary and total cash compensation for 50 job positions** in 50 countries worldwide. The benchmark data is used by multinational organizations to set pay levels for employees globally.

[**The positions covered in the full Global Pay Summary reflect entry-level roles to management roles in 11 major job families: administration; corporate affairs; engineering; finance; general management; human resources; information technology; operations; research and development; sales and marketing; and supply and logistics.]

“Global pay data helps multinational companies make decisions about sourcing employees and where to set up overseas operations. Factors such as retention costs, availability of skills, and productivity influence market rates and determine what an organization must pay to attract and retain talent in the respective locations,” said Mr. Gross.

Finance directors

US-based finance directors are the highest paid, earning US$250,000 on average, followed by those in Canada and the UK, who receive around US$186,400 and US$180,300 respectively. Their counterparts in Hong Kong, Italy, and Germany also earn above-average base pay, at US$168,500, US$159,000, and US$154,400.

Annual total cash for finance directors follows the same pattern as base pay. US-based finance directors are the highest paid, earning annual total cash of US$324,600 on average, followed by those in Canada and the UK, who receive approximately US$262,700 and US$236,600, respectively.

At the lower end of the spectrum, finance directors in Hungary and India receive less than average for this position – earning a base salary of approximately US$59,800 and US$53,800. Average base pay for this role in Poland is US$108,200.

Mark Edelsten, a principal at Mercer, commented: “In many organizations, finance directors are the second-highest-paid individuals, receiving only slightly less than the CEO. The scope of their role has widened in recent years as new regulatory burdens and risk management responsibilities make them increasingly accountable for company governance.”

Marketing directors

Base pay for marketing directors ranges between US$203,100 in the US and US$40,000 in India. Marketing directors in the US are followed by those in Italy and the UK, who are paid around US$169,100 and US$167,800.

Marketing directors in the US also receive the most annual total cash, followed by those in the UK, Germany, and Italy.

While Hungary and Poland still feature toward the bottom of the rankings, interestingly, pay for marketing directors in these countries and Germany is higher (US$91,000, US$110,600, and US$165,000) than that for finance directors.

“Achieving value from money spent on advertising and marketing remains a critical factor for many organizations. The high levels of pay for marketing directors in some countries reflects the fact that marketing and brand management are now considered key to enhancing company performance,” said Mr. Edelsten.

Human resources directors

HR director is the lowest paid role of the three positions covered. The best paid HR directors are found in the US, UK, and Germany where employees can earn US$175,000, US$161,900, and US$160,500 respectively. Annual total cash for this position is highest in Germany, at US$227,500, followed by US$219,000 in the US and US$202,500 in the UK.

Again, employees in this position working in Hungary and India earn significantly less annual base pay than in those in other countries – receiving around US$57,100 and US$47,900 respectively.
 
Mr. Gross said, “Bonuses increase pay significantly for many positions. Although HR directors in the US receive the highest salaries, those in Germany are paid most in terms of annual total cash. This reflects the value placed on HR directors in steering their companies and dealing with the various works councils.”

Mercer’s Global Pay Summaries are available in four volumes: Americas, Asia-Pacific, Eastern Europe and Middle East, and Western Europe..

Notes: The pay figures above are rounded to the nearest $100.

Job descriptions

Finance director – formulates strategies, policies, and procedures, including sales, costing, tax, asset, budget, credit, and cash flow management.

Marketing director – leads the marketing department; direct marketing strategy on product positioning, market penetration, and pricing.

Human resources director – responsible for the strategic planning of the human resource function, including recruitment, training, organization development, compensation, and employee relations.