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Businesses across the Gulf Cooperation Council have had a good year, with more CEOs expecting to receive bonuses for their performance. That’s according to a study by executive search firm Cooper Fitch.
In its annual CEO study, Cooper Fitch solicits CEOs’ views on topics such as company and personal priorities, key achievements, and compensation and benefits, and found that the region’s CEOs are riding a wave of optimistic outlook – Including their own wallet.
More than four-fifths (83%) of CEOs expect to receive a performance-related bonus over the past 12 months this year, up 8% from the same period last year.
Notably, more than half (56%) of the CEOs surveyed expect their bonuses to be higher than last year, while only 8% expect their bonuses to be lower than last year.
However, there are differences between countries. In the UAE, 70% of CEOs expect higher bonuses, compared with 47% in Saudi Arabia. In Saudi Arabia, around two-fifths (39%) of senior leaders expect their annual bonuses to be unchanged and 14% expect their bonuses to decrease this year, compared with all UAE CEOs expecting their The bonus will be kept at a minimum to stay at the same level.
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When asked how much they expected their bonuses to change, the largest share of CEOs surveyed (29%) said they expected bonuses to increase between 1% and 10%. A small 4% of CEOs – those who rate their companies (or themselves) as top performers – expect their bonuses to double from previous levels.
More than a quarter (27%) of CEOs expect bonuses to be equivalent to 1-3 months of annual salary, and 42% say bonuses are equivalent to 4-6 months of salary.
Cooper Fitch further noted in its analysis that utilization of long-term incentive schemes in the GCC remains relatively low. Utilization of such programs in mature economies exceeds 75%, based on Aon’s previous benchmarks, primarily due to their focus on long-term leadership retention and the ability to defer compensation until major milestones in the future.
Meanwhile, in the GCC, more than half (52%) of companies do not include long-term incentive plans in their remuneration packages. “We expect this number to decline over the next few years as regional markets continue to mature,” said Jack Khabbaz, managing partner and head of the CEO practice at Cooper Fitch.
Recent research by Heidrick & Struggles found that CEOs in the Middle East are the youngest in the world, while another study by PwC found that the region’s CEOs are the most motivated on the planet.
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