Executive Compensation Benchmark Report

© 2014 Towers Watson. All rights reserved.
Compensation Review
Company X
21 May 2014

towerswatson.com
© 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
Table of Contents
1. Introduction
2. Methodology
3. Annual Base Salary
4. Total Guaranteed Compensation
5. Target Total Compensation
6. Actual Total Compensation
7. Annual Target Total Variable Pay
8. Annual Actual Total Variable Pay
9. Pay-Mix
10. Benefits Audit
11. Key Findings & Recommendations
Appendices
A. Definition of Terms
B. Participants Organizations
C. Job Descriptions
2

towerswatson.com
1. Introduction
 Towers Watson has been asked to benchmark the pay of 10 senior executives at Company X against
the market and to review the internal equity of pay for job at the same level. The following
compensation items have been analyzed:
 Compa-Ratio Report: The principle of the compa-ratio is to present the comparison of data against a scale. Data
exactly similar would have “100%” alignment and different data would be positioned somewhere above and below
the 100% alignment point. Towers Watson is considering the following scale:
— Below 80% and above 120%; the positioning of data is respectively WELL BELOW and WELL ABOVE the market reference
— Between 80% - 85% and 115% - 120% is when the positioning of the data is respectively BELOW and ABOVE the market reference
— Between 85% - 115% is when the positioning of data is said to be ALIGNED to the market
 Annual Base Salary
 Total Guaranteed Compensation
 Target Total Compensation
 Actual Total Compensation
 Pay Mix
 Annual Target Total Variable Pay
 Annual Actual Total Variable Pay
3

towerswatson.com
1. Introduction
4
 Company X’s compensation was benchmarked against the following companies, defined from the
Towers Watson 2013 General Industry Survey
 We have analyzed and summarized the benchmarking data both by individual role and by Global
Grade
 Our commentary on the results takes into account the Company’s statement that its agreed
policy is to position Executive pay at the Upper Quartile (75th percentile)
 The data has been extracted from our 2013 General Industry Survey ad has not been aged to current
date. In our view this provides a good basis for comparability with Company X’s current pay levels but
any review of those levels must take into account that, in general, Executive pay has increased over
the last year by about 5%.

towerswatson.com
2. Methodology
The following 4 step process was deployed for this project:
5
Data
Collection
• Reviewed following key items:
• Organisation Charts
• Global Grade Evaluations
Peer Group
selection
• Selection of 11 companies among the Towers Watson General Industry Survey participants
Market Data
Analysis
• Compa Ratio Analysis for ABS, TGC, TTC and ATC against selected Peer Group
• Pay mix analysis
• Internal Equity analysis
Reporting
• Power Point Summary
• Excel Report of all compensation analyses
• Presentation of results and discussion

towerswatson.com
3. Annual Base Salary
 The COO Admin and COO Retail base salaries are well below the market for their roles and Global
Grade.
 The Chief Information Officer’s (CIO) base salary is well below the market 75th percentile for the role
and substantially below those of his peers. It is in line with the base salary of the General Manager at
Global Grade 17
 The KSA Managing Director is well above the 75th percentile of the market for his role and is in fact
well above the 90th percentile for Global Grade 18.
 The GM at Global Grade 17 is below the Upper Quartile of the market for the role and well below the
market for Global Grade 17.
 The GM at Global Grade 16 is well below the Upper Quartile for Global Grade 16, although in line with
the Upper Quartile for the role.
 Clearly there may be some internal equity issues on base salary as between roles with Global Grades
at 20,19, and 18, particularly this is the case with the two Global Grade 20 roles and the CIO.
6

towerswatson.com
3.1 Results – Company X Compa-ratio to Peer Market
Annual Base Salary
The current full-time equivalent (FTE) annual base salary, including any guaranteed additional fixed payments such as holiday pay and any extra-contractual
months required by law, collective agreement or company practice. This is a fixed amount, typically paid in monthly payments.
Company X JOB ROLE
Towers
Watson
Global
Grades
Company X
Annual Base
Salary
25th
Percentile
% Ratio @
25th Perc.
MEDIAN
% Ratio @
Median
75th
Percentile
% Ratio @
75th Perc.
Chief Operating/Admin. Officer 20 1,200,000 1,626,595 73.8% 1,752,000 68.5% 1,766,700 67.9%
Chief Operating Off. / Retail 20 1,212,000 1,459,745 83.0% 1,620,217 74.8% 1,757,250 69.0%
Chief Financial Officer 19 1,128,000 840,039 134.3% 1,082,166 104.2% 1,402,890 80.4%
Chief Human Resources Officer 19 1,080,000 948,712 113.8% 1,199,300 90.1% 1,270,762 85.0%
Chief Operating Off./Regional 18 1,188,000 863,037 137.7% 1,106,346 107.4% 1,222,310 97.2%
Chief Legal Officer 18 1,056,000 870,000 121.4% 1,022,500 103.3% 1,284,000 82.2%
Chief Information Officer 18 840,000 840,561 99.9% 945,150 88.9% 1,085,817 77.4%
MD Emerging Markets 18 1,020,000 565,293 180.4% 863,037 118.2% 979,656 104.1%
MD Havas 18 1,128,000 565,293 199.5% 863,037 130.7% 1,138,806 99.1%
MD UAE 18 1,116,000 550,307 202.8% 838,865 133.0% 1,059,231 105.4%
MD KSA 18 1,320,000 754,248 175.0% 756,000 174.6% 1,031,433 128.0%
General Manager 18 1,020,000 655,358 155.6% 863,037 118.2% 979,656 104.1%
General Manager 17 828,000 728,376 113.7% 780,000 106.2% 985,800 84.0%
General Manager 16 540,000 489,660 110.3% 572,460 94.3% 604,890 89.3%
7

towerswatson.com
8
ArabEmiratiDirhams(AED)
3.2 Annual Base Salary per Role
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000

towerswatson.com
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
Global Grade 20 Global Grade 19 Global Grade 18 Global Grade 17 Global Grade 16
9
3.3 Annual Base Salary per Grade
Chief Operating/Admin. Officer (GG20)
Chief Operating Off. / Retail (GG20)
Chief Financial Officer (GG19)
Chief Human Resources Officer (GG19)
Chief Operating Off./Regional (GG18)
Chief Legal Officer (GG18)
General Manager (GG18)
Chief Information Officer (GG18)
MD Emerging Markets (GG18)
MD Havas (GG18)
MD UAE (GG18)
MD KSA (GG18)

towerswatson.com
4. Total Guaranteed Compensation
 The addition of Cash Allowances to Base Salary to form Guaranteed Compensation changes a
number of the relativities noted in regard to base salary.
 The positions of the COO Admin, COO Retail, COO Regional and MD Emerging Markets deteriorate
for their roles relative to the Upper Quartile, and the Pay Mix analysis on p28 shows that their
Allowance as percentages of Total Guaranteed Compensation are below or well below market.
 The CFO and CHRO improve relative to the Upper Quartile for their roles but are low against the
Upper Quartile of Global Grade 19.
 The positions of the Chief Legal Officer and GM at Global Grade 16 improve relative to the Upper
Quartiles for their roles
10

towerswatson.com
The sum of annual base salary and any fixed cash allowances.
Company X JOB ROLE
Towers
Watson
Global
Grades
Company X
Total
Guaranteed
Compensation
25th
Percentile
% Ratio @
25th Perc.
MEDIAN
% Ratio @
Median
75th
Percentile
% Ratio @
75th Perc.
Chief Financial Officer 19 1,596,240 1,491,803 107.0% 1,651,260 96.7% 1,814,120 88.0%
Chief Human Resources
Officer
19 1,507,716 1,383,382 109.0% 1,419,700 106.2% 1,651,487 91.3%
Chief Operating Off./Regional 18 1,525,060 1,457,502 104.6% 1,516,418 100.6% 1,635,745 93.2%
Chief Legal Officer 18 1,466,876 1,157,825 126.7% 1,332,500 110.1% 1,500,100 97.8%
Chief Information Officer 18 1,210,884 1,023,370 118.3% 1,446,312 83.7% 1,534,482 78.9%
MD Emerging Markets 18 1,295,220 985,745 131.4% 1,422,633 91.0% 1,495,441 86.6%
MD Havas 18 1,485,304 971,688 152.9% 1,308,299 113.5% 1,441,239 103.1%
MD UAE 18 1,491,476 948,120 157.3% 1,457,502 102.3% 1,474,464 101.2%
MD KSA 18 1,647,604 824,248 199.9% 1,099,260 149.9% 1,428,480 115.3%
General Manager 18 1,440,000 948,120 151.9% 1,387,764 103.8% 1,474,464 97.7%
General Manager 17 1,197,000 988,380 121.1% 1,128,383 106.1% 1,326,723 90.2%
General Manager 16 849,000 744,485 114.0% 828,127 102.5% 877,017 96.8%
Total Guaranteed Compensation
11

towerswatson.com
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2,200,000
2,400,000
2,600,000
2,800,000
3,000,000
4.2 Total Guaranteed Compensation per Role
12
*Including Education Allowance

towerswatson.com
13
4.3 Total Guaranteed Compensation per Grade
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
MD Havas (GG18)
MD UAE (GG18)
MD KSA (GG18)

towerswatson.com
5. Target Total Compensation
 With the addition of Target annual variable pay, as shown on page 23, the COO Admin is below the
market 25th percentile for the role (as a result of Target Variable pay of only 10%) and the COO Retail
is also below the Lower Quartile for the role. Both are well below the Lower Quartile for Global Grade
20
 Both the CFO and the CHRO are well below the market Upper Quartile for Global Grade 19.
 The CIO and the MD Emerging markets are below or well below the market 75th percentile for their
respective roles and both below the Median for Global Grade 18
 The other roles at Global Grade 18, except the MD KSA, are aligned with the market at the Upper
Quartile for their roles but below the Upper Quartile for the Global Grade.
 The MD KSA is very substantially above the 75th percentile for the role but at the Upper Quartile for
Global Grade 18.
14

towerswatson.com
The sum of total guaranteed compensation and target total variable pay
Company X JOB ROLE
Towers
Watson
Global
Grades
Company X
Target Total
Compensation
25th
Percentile
% Ratio @
25th Perc.
MEDIAN
% Ratio @
Median
75th
Percentile
% Ratio @
75th Perc.
Officer
19 1,939,716 1,788,028 108.5% 1,975,315 98.2% 2,090,002 92.8%
Chief Operating Off./Regional 18 1,881,460 1,593,980 118.0% 1,754,540 107.2% 2,047,782 91.9%
MD Emerging Markets 18 1,601,220 1,033,771 154.9% 1,712,066 93.5% 2,034,045 78.7%
MD Havas 18 1,936,504 1,164,396 166.3% 1,669,591 116.0% 2,020,308 95.9%
MD UAE 18 1,826,276 1,164,396 166.3% 1,669,591 116.0% 1,853,332 104.5%
MD KSA 18 2,043,604 1,384,881 147.6% 1,012,810 201.8% 1,564,810 130.6%
General Manager 18 1,746,000 1,164,396 149.9% 1,669,591 104.6% 2,020,308 86.4%
General Manager 17 1,556,100 1,137,810 136.8% 1,269,070 122.6% 1,590,822 97.8%
General Manager 16 1,103,700 909,552 121.3% 1,012,186 109.0% 1,074,348 102.7%
Target Total Compensation
15

towerswatson.com
16
5.3 Target Total Compensation per Role
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2,200,000
2,400,000
2,600,000
2,800,000
3,000,000

towerswatson.com
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
17
5.4 Target Total Compensation per Grade
MD Havas (GG18)
MD UAE (GG18)
MD KSA (GG18)

towerswatson.com
6. Actual Total Compensation
 Actual Variable pay changes the picture dramatically, especially in respect of the Chief Officer Retail
and the MD KSA.
 In most cases the payment of two or three variable pay elements significantly improves the market
relativities for the Company X executives
 However, it is noticeable that the CIO, and GMs at Global Grades 17 and 16 are not beneficiaries.
18

towerswatson.com
The sum of total guaranteed compensation and actual total variable pay
Company X JOB ROLE
Towers
Watson
Global
Grades
Company X
Actual Total
Compensation
25th
Percentile
% Ratio @
25th Perc.
MEDIAN
% Ratio @
Median
75th
Percentile
% Ratio @
75th Perc.
Chief Operating/Admin.
Officer
20 2,414,800 2,061,505 117.1% 2,263,680 106.7% 2,609,075 92.6%
Officer
19 2,081,183 1,452,128 143.3% 1,646,288 126.4% 1,694,400 122.8%
Chief Operating
Off./Regional
18 3,067,793 926,429 331.1% 1,588,045 193.2% 1,824,505 168.1%
MD Emerging Markets 18 1,769,194 948,120 186.6% 1,195,414 148.0% 1,768,130 100.1%
MD Havas 18 2,645,070 1,071,767 246.8% 1,195,414 221.3% 1,824,505 145.0%
MD UAE 18 3,826,494 1,063,707 359.7% 1,195,414 320.1% 1,862,027 205.5%
MD KSA 18 5,327,573 1,011,546 526.7% 1,053,266 505.8% 1,122,800 474.5%
General Manager 18 2,457,200 721,213 340.7% 1,195,414 205.6% 1,711,754 143.5%
General Manager 17 1,378,000 1,023,576 134.6% 1,117,996 123.3% 1,259,720 109.4%
General Manager 16 931,000 864,489 107.7% 908,405 102.5% 1,011,382 92.1%
Actual Total Compensation
19

towerswatson.com
20
6.2 Actual Total Compensation per Role
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
5,500,000
6,000,000
6,500,000

towerswatson.com
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
21
6.3 Actual Total Compensation per Grade
MD Havas (GG18)
MD UAE (GG18)
MD KSA (GG18)

towerswatson.com
7. Annual Target Total Variable Pay
 In general, with the exception of the COO Admin, Target Variable Pay is largely in line with the market
Median policy levels that we see more widely outside the Financial Sector, even if the levels for
individual roles, as shown on page 23 following, may vary somewhat
 It is difficult to understand what the justification would be for a Target annual variable of 10% for the
COO Admin, compared to 30% or 40% for other roles
22

towerswatson.com
Target variable cash rewards, in the form of performance/corporate bonuses and/or sales bonus and/or sales commission
Company X JOB ROLE
Towers
Watson
Global
Grades
Company X
Annual
Bonus %
25th
Percentile
(%)
% Ratio @
25th Perc.
MEDIAN
(%)
% Ratio @
Median
75th
Percentile
(%)
% Ratio @
75th Perc.
Chief Operating/Admin. Officer 20 10.0 31.4 31.9% 34.2 29.2% 34.6 28.9%
Chief Operating Off. / Retail 20 40.0 31.4 127.4% 34.2 116.8% 34.6 115.5%
Chief Financial Officer 19 40.0 24.0 167.0% 27.0 148.1% 38.5 103.9%
Officer
19 40.0 25.0 160.0% 32.0 125.0% 45.0 88.9%
Chief Operating Off./Regional 18 30.0 17.3 173.4% 30.0 100.0% 35.0 85.7%
Chief Legal Officer 18 40.0 21.0 190.2% 29.0 137.9% 30.0 133.3%
Chief Information Officer 18 40.0 27.8 144.1% 33.0 121.2% 50.0 80.0%
MD Emerging Markets 18 30.0 22.8 131.9% 48.5 61.9% 67.0 44.8%
MD Havas 18 40.0 22.8 175.8% 48.5 82.5% 67.0 59.7%
MD UAE 18 30.0 22.8 131.9% 48.5 61.9% 67.0 44.8%
MD KSA 18 30.0 25.0 120.0% 25.0 120.0% 30.0 100.0%
General Manager 18 30.0 20.5 146.3% 30.0 100.0% 67.0 44.8%
General Manager 17 30.0 16.1 186.5% 24.2 124.2% 33.8 88.9%
General Manager 16 30.0 29.0 103.4% 32.0 93.8% 35.8 83.9%
Annual Target Total Variable Pay
23

towerswatson.com
8. Annual Actual Total Variable Pay
 Actual total variable payments made, including Discretionary payments and profit share are generally
high and in the cases of the COO Retail, COO Regional, MD Havas, MD KSA and the MD at Global
Grade 18 are exceptionally high
 Clearly this is the result of the Profit share formulae and it must be called into question whether those
formulae remain appropriate for the size of the business units now as compared with previous years
24

towerswatson.com
Actual variable cash rewards, in the form of performance/corporate bonuses and/or sales bonus and/or sales commission
Company X JOB ROLE
Towers
Watson
Global
Grades
Company X
Variable Pay
25th
Percentile
% Ratio @
25th Perc.
MEDIAN
% Ratio @
Median
75th
Percentile
% Ratio @
75th Perc.
Chief Operating/Admin. Officer 20 898,000 343,696 261.3% 500,000 179.6% 550,000 163.3%
Chief Operating Off. / Retail 20 4,907,663 343,696 1427.9% 500,000 981.5% 550,000 892.3%
Chief Financial Officer 19 862,817 250,858 343.9% 350,000 246.5% 366,118 235.7%
Officer
19 573,467 219,546 261.2% 247,934 231.3% 343,079 167.2%
Chief Operating Off./Regional 18 1,542,733 227,702 677.5% 326,460 472.6% 375,513 410.8%
Chief Legal Officer 18 672,283 243,188 276.4% 261,875 256.7% 350,449 191.8%
Chief Information Officer 18 320,583 250,345 128.1% 261,382 122.6% 287,649 111.4%
MD Emerging Markets 18 473,974 242,193 195.7% 284,865 166.4% 390,599 121.3%
MD Havas 18 1,159,766 242,193 478.9% 284,865 407.1% 390,599 296.9%
MD UAE 18 2,335,018 242,193 964.1% 284,865 819.7% 390,599 597.8%
MD KSA 18 3,679,969 229,018 1606.8% 231,236 1591.4% 236,726 1554.5%
General Manager 18 1,017,200 242,193 420.0% 284,865 357.1% 390,599 260.4%
General Manager 17 686,000 117,567 583.5% 165,000 415.8% 242,415 283.0%
General Manager 16 525,000 163,140 321.8% 173,807 302.1% 196,514 267.2%
Annual Actual Total Variable Pay Including Discretionary Bonus
25

towerswatson.com
Actual variable cash rewards, in the form of performance/corporate bonuses and/or sales bonus and/or sales commission
Company X JOB ROLE
Towers
Watson
Global
Grades
Company X
Variable Pay
25th
Percentile
% Ratio @
25th Perc.
MEDIAN
% Ratio @
Median
75th
Percentile
% Ratio @
75th Perc.
Chief Operating/Admin. Officer 20 93,000 343,696 27.1% 500,000 18.6% 550,000 16.9%
Chief Operating Off. / Retail 20 4,677,663 307,435 1521.5% 344,869 1356.4% 382,304 1223.5%
Chief Financial Officer 19 326,150 250,858 130.0% 350,000 93.2% 366,118 89.1%
Officer
19 346,800 219,546 158.0% 247,934 139.9% 343,079 101.1%
Chief Operating Off./Regional 18 1,386,066 227,702 608.7% 326,460 424.6% 375,513 369.1%
Chief Legal Officer 18 338,950 243,188 139.4% 261,875 129.4% 350,449 96.7%
Chief Information Officer 18 267,250 250,345 106.8% 261,382 102.2% 287,649 92.9%
MD Emerging Markets 18 323,974 242,193 133.8% 284,865 113.7% 390,599 82.9%
MD Havas 18 1,099,766 242,193 454.1% 284,865 386.1% 390,599 281.6%
MD UAE 18 2,248,351 242,193 928.3% 284,865 789.3% 390,599 575.6%
MD KSA 18 3,679,969 229,018 1606.8% 231,236 1591.4% 236,726 1554.5%
General Manager 18 1,017,200 242,193 420.0% 284,865 357.1% 390,599 260.4%
General Manager 17 686,000 117,567 583.5% 165,000 415.8% 242,415 283.0%
General Manager 16 525,000 163,140 321.8% 173,807 302.1% 196,514 267.2%
Annual Actual Total Variable Pay Excluding Discretionary Bonus
26

towerswatson.com
9. Pay-Mix
 Within the market we find that the relative proportions of base salary and Allowances that make up
Guaranteed Compensation mix vary from 50:50 to 80:20, and the inclusion or exclusion of Education
Allowances (which are actually a family-dependent Benefit) do not have a large material impact on
those proportions
 Companies with a pay mix in which base salary represents less than 50% of Guaranteed
Compensation have tended to have this to minimise the additional cost of End-Of-Service-Benefits
 The dominant pay mix is increasingly around 60:40, with more and more companies moving to a policy
of having a single amount representing what used to be the different cash allowances.
 Broadly, Company X is in line with market practice although not consistent in the application of a
policy.
27

towerswatson.com
Pay-Mix Ranges
Company X JOB ROLE
Job Matching
Information
Company X
Annual Base
Salary
Company X
Annual
Allowances
Annual Allowances
as % of TGC
Peer Market
Practice -
Average
Positioning vs. Peer
Market
Chief Operating/Admin. Officer AAA020-20 1,200,000 316,800 21% 25% Below
Chief Operating Off. / Retail AAA020-20 1,212,000 356,500 23% 30% Well Below
Chief Financial Officer AFA000-19 1,128,000 468,240 29% 33% Aligned
Chief Human Resources Officer AHR000-19 1,080,000 427,716 28% 22% Well Above
Chief Operating Off./Regional AAA020-18 1,118,000 337,060 22% 27% Below
Chief Legal Officer ALG000-18 1,056,000 410,876 28% 24% Well Above
Chief Information Officer AIC000-18 840,000 370,884 31% 27% Aligned
MD Emerging Markets AAB000-18 1,020,000 275,220 21% 38% Well Below
MD Havas AAB000-18 1,128,000 357,304 24% 38% Well Below
MD UAE AAB000-18 1,116,000 375,476 25% 38% Well Below
MD KSA AAB000-18 1,320,000 327,604 20% 16% Well Above
General Manager AAB000-18 1,020,000 420,000 29% 38% Well Below
General Manager AAB000-17 828,000 369,000 31% 28% Aligned
General Manager AAB000-16 540,000 309,000 36% 29% Well Above
Guaranteed Pay-Mix
28

towerswatson.com
29
Total compensation Pay-Mix Graphic Representation

towerswatson.com
10. Benefits Audit
Educational Allowance
30
Market Company X
Most companies provide an educational allowance to
employees with children
Typically there is a cap of 3 children
Typically these amounts are paid to employees with
children and upon receipt.
Typically this allowance kicks in at a certain level only
Values of yearly (AED)
From To
General Management 36,000 - 50,000
Middle Management 16,000 - 28,000
Professionals 15,000 - 20,000
Company X provides an educational allowance to its
executive employees
Maximum number of children reported to be 3
Typically these amounts are paid to employees with
children and upon receipt.
Typically this allowance kicks at the executive level
only
Values of yearly (AED)
Amount
Grade 20 40,000
Grade 19 40,000
Grade 18 40,000
Grade 17 35,000
Grade 16 31,000
 Company X’s practices and levels of Education Allowances are in line with the market

towerswatson.com
10.1 Benefits Audit
Annual Vacation Tickets
31
Market Company X
Most companies provide vacation/home leave tickets at least
once per annum for all employee levels.
The employee and his/her family (spouse/husband and up to 3
children) would typically benefit from this allowance in most
companies.
Average Values of tickets: (AED)
From To
General Management 15,000 - 20,000
Middle Management 10,000 - 14,000
Professionals 4,500 - 7,000
Company X provides vacation/home leave tickets to its
executive employee levels.
The employee and his/her family (spouse/husband would
typically benefit from this allowance.
Values of Company X tickets: (AED)
Amount - Family Members
Chief Operating/Admin. Officer 4,583 - 0
Chief Operating Off. / Retail 2,375 - 2
Chief Financial Officer 3,870 - 2
Chief Human Resources Officer 1,493 - 2
Chief Operating Off./Regional 2,355 - 2
Chief Legal Officer 1,173 - 2
Chief Information Officer 1,440 - 2
KSA Managing Director 4,317 - 2
UAE /Emerging. Managing Director 535 - 2
Managing Director 2,375 - 2
Managing Director 2,223 – 2
 The amounts given for individuals in Company X appear to be the cost of individual tickets. These
seem to be in line with market practice but it is not clear whether the potential number of tickets is in
line with market

towerswatson.com
32
Market Company X
All of the participant companies provide health and
medical cover to employees at all levels and typically
to:
• Employee
• Spouse
• Children
Typical supplemental benefits may include:
• Surgery/hospitalization
• Pre- and post-hospitalization
• Full outpatient cover
• Serious illness treatment
• Maternity
Company X provides health and medical cover to
employees at the executive level and typically to:
Chief Operating/Admin. Officer - For self
Chief Operating Off. / Retail - Self + Family
Chief Financial Officer - Self + Family
Chief Human Resources Officer - Self + Family
Chief Operating Off./Regional - Self + Family
Chief Legal Officer - Self + Family
Chief Information Officer - Self + Family
KSA Managing Director - Self + Family
UAE / emerging. Managing Director - Self
Managing Director - Self + Family
Managing Director - Self + Family
10.2 Benefits Audit
Medical Insurance
 Company X’s medical insurance provision seems broadly in line with market practice

towerswatson.com
© 2014 Towers Watson. All rights reserved. Proprietary and Confidential.
11. Key Findings & Recommendations (1/2)
33
 Internal Equity
 Clearly there are issues about the internal equity of base salaries between roles at Global Grades
20,19 and 18, as reported on Page 6.
 These internal equity issues are worsened by the results of the profit share arrangements for
Commercial roles and a reappraisal of the profit share formulae would be in order.
 Guaranteed Compensation and mix
 The inclusion of Education Allowances, which are a family-related Benefit, may distort the picture
slightly in regard to Guaranteed Compensation mix. Company X should consider moving to a
standard policy under which Allowances would be calculated in a fixed ratio to Base Salary.
 Commercial v Support roles
 Different companies follow different practices in regard to discriminating on pay between
Commercial (“Revenue Generating”) and Support roles:
— Many don’t differentiate
— Some do in regard to Total Cash pay mix, eg in Banking, with higher but potentially more variable bonus
opportunities for Revenue Generators than for Support and sometimes lower fixed pay
— Some offer lower fixed pay for Support than for Revenue Generators
 Our view is that it would be appropriate to differentiate on Variable pay opportunities, rather than
fixed pay for roles at the same level, but not to the extreme extent practiced by Company X.

towerswatson.com
11. Key Findings & Recommendations (2/2)
34
 Commercial v Support roles (cont)
 There is no ideal compensation mix which differentiates Commercial from Support. Each company
should address and decide on its pay philosophy to support its business strategy in order to decide
whether what its pay mix should be and if it should differentiate.
 Variable pay
 The provision of large amounts of discretionary bonus in addition to target bonus opportunities at
Company X is poor practice. It undermines the transparency of pay arrangements and the link
between measurable performance and reward
 If the intention of the discretionary bonus is to go some way to “level’ the treatment of different
executives it would be better simply to review and increase all target bonus opportunities. In any
case the Target variable pay for the CO/Admin Officer should be changed
 The excessive values of profit share payouts suggest that there is a fundamental flaw in the
calculation of those profit shares.
 As support roles contribute to the health and success of the Group there is, in principle, no reason
why they should not share in the profits of the overall Group – even if it is to a lesser extent than the
Commercial roles’ shares in the profit performance of their parts of the business. Group profit share
might encourage more entrepreneurial behaviour
 Company X should consider joining the gathering trend to make some part of reward long-term
performance based. This could be through bonus deferral but might more effectively be through a
dedicated long term incentive plan

towerswatson.com
Appendix A – Definition of Terms
35
Ranges
10th Percentile: Value below which 10% of the data lie.
25th Percentile: Value below which 25% of the data lie.
Median: Value above/below which 50% of the data lie.
75th Percentile: Value above which 25% of the data lie.
90th Percentile: Value above which 10% of the data lie.
N°of Companies : Number of companies reporting incumbents taken into account in the calculations.
N°of Incumbents : Number of individual incumbents taken into account in the calculations.
Cash Components
Annual Base Salary: Includes monthly base salary multiplied by the appropriate number of months based on the country statutory requirement,
and other fixed payments (such as fixed guaranteed bonuses and contractual bonuses). Expressed as an annual amount.
Total Guaranteed Compensation: The sum of annual base salary and any fixed cash allowances.
Target Total Compensation: The sum of total guaranteed compensation and target total variable pay.
Actual Total Compensation: The sum of total guaranteed compensation and actual total variable pay.
Target Total Variable Pay: Target variable cash rewards (including profit-sharing), in the form of performance/corporate bonuses and/or sales
bonus and/or sales commission.
Actual Total Variable Pay: Actual variable cash rewards (including profit-sharing), in the form of performance/corporate bonuses and/or sales
bonus and/or sales commission.
Target Total Rewards excluding LTI: The sum of annual base salary, fixed cash allowances, target total variable pay and valued benefits.
Actual Total Rewards excluding LTI: The sum of annual base salary, fixed cash allowances, actual total variable pay and valued benefits.
Pay-Mix: The combination of various types of rewards – such as base pay, performance incentives, stock options, and benefits – that an
individual receives.

Executive Compensation Benchmark Report

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (19)

Similar to Executive Compensation Benchmark Report

Similar to Executive Compensation Benchmark Report (20)

Executive Compensation Benchmark Report