German, male, mid-cap IRO: the combination that pays
Heads of IR at some German mega-cap firms brought home a total package of €480,000 ($545,000) last year, while the average salary for that cap size was €150,000, reveals the annual IR compensation study by recruitment firm Korn Ferry and the IR Club.
Less senior positions such as IR directors, IR managers and junior IR roles attracted average total incomes of €136,000, €85,000 and €65,000, respectively, with two thirds of them reporting a salary raise within the last two years. The vast majority of respondents earned a base salary of less than €100,000, with 42 percent in the €70,000-€100,000 bracket, and only 7 percent earning more than €160,000.
Most German IROs didn’t have a complaint to make about their bonuses, however: 41 percent report an increase on 2014’s bonus payment, with just 16 percent of those surveyed ‒ mostly from the lower salary brackets ‒ receiving nothing at all. Bonus amounts varied greatly, ranging from nil to 110 percent of base salary and averaging 18 percent overall.
Men and women earned virtually the same for jobs of equivalent seniority, with a slight advantage for men in a director’s position. But the highest reported salaries in the mid-cap category were all earned by men, and the best-paid male head of IR made €100.000 more than his female counterpart. Moreover, for the same mid-cap sample, male IROs consistently earned a bonus that was a higher percentage of their salary, with the widest gap again occurring at director level -a 19 percentage-point difference over women.
The study also finds that while a large portion of IROs were usually given benefits such as a pension plan, a company car or paid training, most companies could improve the long-term performance incentives they offer their IR employees: less than a quarter of participants have actually received any equity-based compensation.
As in most countries, the IR function in Germany stays firmly rooted in the finance department, with 44 percent of IROs reporting to the CFO. But the results also highlight the growing importance and strategic aspect of the IR role, with a sizable 38 percent of respondents reporting directly to the company’s chief executive.
Finally, most German IROs looking ahead are aiming for a job… in IR. Nearly half of IROs are keen to upgrade to a larger firm and become head of IR, a quarter of them target a CFO position, 15 percent see a future leading corporate communications, and only 3 percent believe they will one day become COO.
Among the 151 respondents, half are aged 35 to 45 and working for a mid or large-cap firm. Fifty-six percent hold a senior executive position at director level or higher, and more than half the participants have more than five years’ IR experience. One third of IROs hold a relevant qualification such as CFA charterholder, Certified International Investment Analyst or Certified European Financial Analyst, or an IR certificate.