It’s been 150 years or so since Horace Greeley supposedly pointed young men west, but today you want to be going the other way.
According to a new survey by the Association of Executive Search Consultants, executives in the Asia-Pacific region are earning the highest base salaries in the world, driven partly by employers in China sweetening pay packages to retain talent amid a severe management shortage.
The base salary for senior-level executives in the Asia Pacific region during the year ended Sept 30 was $243,642 according to the survey of 778 executives from around the world. By contrast, higher-ups in the Americas have an annual base pay of $229,261 and the average base salary in the emerging markets of Europe, the Middle East and Africa was $212,066.
Within Asia Pacific, most executives made between $201,000 and $250,000, according to the survey. The majority of executives in the Americas were in the same pay range, while the highest percentage of executives in EMEA made between $151,000 and $200,000.
World’s worst shortage
China is grappling with the world’s worst shortage of managers, mainly owing to a dearth of professionals with Mandarin and English skills who are familiar with local and business culture and who are willing to relocate on short notice, according to the AESC.
According to the Financial Times earlier this year, China’s business-education system cannot turn out high-quality managers fast enough to meet demand.
While the Asia-Pacific region may be offering the highest base salaries in the world, a cost of living survey in July by Mercer, a consulting unit of Marsh & McLennan Cos, found that Hong Kong had the world’s highest housing costs for expatriate employees.
It cost $7,091.69 a month to rent a luxury two-bedroom unfurnished apartment in Hong Kong, according to the survey – more even than the $6,500 it cost to rent a comparable apartment in Luanda, Angola’s capital city, which Mercer ranked as the world’s most expensive expats city.
Other executive salaries slipping
Meanwhile, as executives in the Asia Pacific region enjoy the world’s highest average base pay rates, executive salaries in general are slipping.
AESC found that the average salary among global executives – also known as the “C suite” (for titles with “chief” in them, such as CEO, COO and CIO) – fell 8.8 percent for the year ended Sept 30. Meanwhile, middle-management salaries rose 4.6 percent during the same period.
“The C-suite appears to no longer be as differentiated from non-C-suite executive-level positions in terms of compensation,” says Joe Chappell, director of global marketing for the AESC.
Of executives surveyed who reported a rise in total compensation, the greatest percentage – 41.8 percent – reported an increase of one to five percent; 26.6 percent had a six to 10 percent increase, while 10 percent reported increases above 20 percent.
AESC CEO Peter Felix said the results highlight “the inconsistencies in perception” about executives being overpaid. “On the contrary, for most senior executives in our survey, salary increases and bonuses have only modestly begun to rise after the financial crisis,” Felix said. Economic conditions pressuring revenue could attribute for the decline, among other factors, he said.
The AESC survey also found the gender pay gap narrowing at the executive level. The average base salary difference between executive men and women was $22,075 in the last fiscal year.