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29 March 2024

CEOs in UAE received no salary hikes this year

Published
By Shuchita Kapur

The demand for CEOs in the UAE notched up marginally this year but has not translated into salary increase, according to experts in the recruitment industry.

“Salary packages are correlated to performance. An increase of any sort would have to be based on the performance level of both the individual as well as the performance of the company,” Russell Adam, Managing Partner, CT Partners told 'Emirates24|7'.

Agrees Konstantina Sakellariou, Partner, Marketing & Operations Director at Stanton Chase. “Increases in the salary packages are not a market phenomenon but mostly depend on each case separately, the seniority of the person, the experience and the specialized expertise brought in,” she said.

Even though there have been no major hikes, the top bosses in the country have fared better than the previous two years.

In 2009, in fact, CEO compensation in the country shrunk owing to an overall economic slowdown and the consequent profitability hit that companies in the country endured. CEO pay is usually divided into two parts. The first part is a reward for their job within the company. The second part of the salary is considered a sweetener – it is used to entice the CEO to stay with that particular company instead of looking for a higher paying offer.

In 2009 and 2010, the second component of CEO compensation received a hit as corporate compensation committees evaluated the decline in profitability as well as the limited opportunity for even quality CEOs to switch jobs. At the same time, due to the global economic downturn, there were a lot of senior-level jobs lost elsewhere in the world, and some of that talent became available for local companies to tap, thus altering the supply-demand dynamics that has pushed up executive pay in the preceding few years.

With this backdrop, expectations were subdued this year as well. “This year expectations for bonuses and pay hikes at the top level have been sharply brought in check,” said Amer Zureikat, VP Sales, Bayt.com.

“CEO packages have been under increasing pressure over the last 18 months here in the Gulf. Increasingly, the proportion of their pay which is performance related is going up, with rewards being paid over long term periods. Therefore, the fixed element of their compensation compared to previous years has remained quite static, and in certain instances have come down. This trend reflects institutions wishes to reward their senior executives based on long term sustainable results as opposed to perceived higher guaranteed compensation at a time when many are exercising prudence and caution,” added Hasnain Qazi, Middle East Business Manager at Huxley Associates.