Executive Compensation & Corporate Governance Insights 2018

This three-part study comprises the years from 2007 to 2017 and investigates board and executive compensation at the largest 100 listed Swiss companies. Moreover, for more recent years, one part of our study also provides a comparison with the largest 130 listed German companies.

Key findings

  • Board and executive compensation are economically highly relevant quantities. The total sum of board and executive compensation (together referred to here as the top management bodies compensation) in the largest 100 companies in 2017 was CHF 1.6 billion. Recent years have seen a shift among companies, from SMI firms to SMIM and small-cap firms.
  • In 2017 the median SMI firm spent CHF 31.8 million on executive compensation, the median SMIM firm CHF 13.2 million and the median small-cap firm CHF 5.2 million. As for board compensation, the totals were, at the median, CHF 4.5 million, CHF 2.0 million and CHF 1.0 million, respectively.
  • The median value of the executive-to-board compensation ratio – the ratio of total compensation of executives divided by total compensation of board members – can indicate the power of executives. In 2017, overall, that ratio was 4.9, the lowest value observed in 11 years, representing the first time this ratio has dropped below 5. There is, however, wide variation across companies.
  • Median total CEO compensation in SMI companies has fallen to its 2009 level, at CHF 5.5 million (-29.5% compared to 2016). Year-on-year, median CEO compensation in SMIM companies has also fallen (by 7.6% to CHF 3.3 million), but is still 54.3% above its 2009 level. Median total CEO compensation has increased by 3.5% in small-cap firms; at CHF 1.4 million it is now 12.7% above 2009 levels.
  • In the spirit of Value Added Statements we have introduced the concept of EBIPT – Earnings Before Interest, Personnel Expenses and Taxes. At the median company, 1.3% of EBIPT goes to the top management bodies, 63.9% to other employees, 5.8% directly to society in form of corporate income taxes and 29.0% to debt- and equity-holders. Plausibly linking compensation to value generated for all stakeholders remains an important challenge for firms to sustain all stakeholders’ involvement in the long run.

Our data allow a wealth of further analysis, and these are just a few of the key points. Feel free to contact us if there are other aspects of compensation you would particularly like to talk about.


Aggregate top management bodies (board and executive) compensation has remained relatively stable over the last 11 years – but there have been substantial moves across companies.
In recent years, executive compensation relative to board compensation is declining.
In 2017, median total CEO compensation in SMI companies returned to 2009 levels, but was still substantially higher than in 2009 among SMIM and small-cap companies.
Larger firms convey a higher fraction of CEO compensation in the form of equity than do smaller firms.

Summary and outlook

Executive compensation in Switzerland has, in the last 11 years, exhibited elements of both stability and change. The total aggregate amounts of compensation paid to boards and executives combined have hardly changed, but the distribution across firms of different size brackets and within firms (between executives and the board; between different roles) has shifted significantly. The structure of compensation has also undergone some change. It is critical for decision-makers to keep abreast of these developments.

In the next volume of this publication, we consider the international dimension. Although the legal and governance system of Germany differs markedly from that of Switzerland, the two markets are close enough to merit comparison. Are Swiss board members and executives paid more or less than their German counterparts? Are there structural differences? How has this changed over time? Find out in PwC Insights 2018, part 2, to be released in October.


Key findings

  • In both Switzerland and Germany, top management bodies compensation increases strongly with firm size. Moreover, the median top management bodies compensation combined is generally somewhat higher in Switzerland than in Germany. Specifically, in Swiss big, medium, and small companies, the median total top management bodies compensation in 2017 amounted to CHF 36.8 million, CHF 16.0 million, and CHF 6.0 million, respectively, whereas in Germany the numbers were CHF 31.1 million, CHF 10.9 million, and CHF 4.5 million, respectively. These differences across countries have declined somewhat since 2014. 
  • The median value of the executive-to-board compensation ratio - the ratio of total compensation of executives divided by total compensation of board members - is substantially higher in Germany than in Switzerland. In 2017, at the median German big, medium, and small firms, the executives as a group received 8.8, 6.6, and 8.2 times as much as the board overall. At the median Swiss firms, these numbers were 6.0, 5.0, and 4.7, respectively. 
  • Individual chairpersons and board members receive higher pay in Switzerland than in Germany. This used to be the case in the early years also for executives, but currently this is no longer true. In 2017, the median Swiss chairperson received approximately three times the compensation of his German counterpart in each of the three size buckets: CHF 1.2 million vs. CHF 361,000; CHF 626,000 vs. CHF 208,000; and CHF 330.000 vs. CHF 111,000. The median SMI CEO received approximately 80% of his German counterpart (CHF 5.5 million, compared to CHF 6.8 million), and the median CEO of Swiss small-cap firms received 87% (CHF 1.4 million, compared to CHF 1.6 million). Only CEOs of medium-sized firms received more in Switzerland than in Germany, with CHF 3.3 million compared to CHF 3.0 million. In the prior years, executives in Switzerland tended to receive somewhat higher compensation. 


  • Fees for the audit committee chairperson are only modestly higher in Switzerland than in Germany, which is initially somewhat surprising but can ultimately be rationalized in the context of the roles and the compensation of other board members in the two countries.
  • The structure of executive compensation is largely similar in Switzerland and Germany. In both countries, the fraction of variable compensation is higher in larger firms. A striking difference arises, however, when it comes to shareholding guidelines: Whereas these are very common in SMI companies and exist in one-third of SMIM companies, they are still quite rare in DAX and MDAX companies. Among small companies such guidelines are hardly in use in Switzerland and Germany. Overall, the results suggest that companies need effective ways of combining compensation elements that reward steps towards the attainment of strategic goals with long-term, equity-based elements.
Median top management bodies compensation in Switzerland and Germany is more similar in 2017 than it was in 2014
Executive-to-Board ratios are higher in Germany than in Switzerland – and the divergence has increased over the last four years
Median CEO compensation is surprisingly similar in Switzerland and Germany

Summary and outlook

Overall, these results show – once again – that common wisdom regarding board and executive compensation needs to be challenged now and then. Some observers have highlighted the higher pay of board members in Switzerland, but the fact that pay levels of executives in the two countries are quite similar has received far less attention. By and large, where differences between Switzerland and Germany exist in the relative levels of board and executive compensation, they can be traced back to differences in the governance systems. In both countries – and in others – the design of effective compensation systems is a challenge. 

To drive this discussion forward, Insights 2018, part 3, released in November 2018, presents a new idea for linking equity-based (long-term) compensation with a focus on the achievement of strategic targets. This versatile method can be adjusted to the circumstances of each firm but is sufficiently general to allow straightforward communication to shareholders and other stakeholders.

Key findings

  • 5 Rs drive value generation through effective governance and compensation design: Recruit (select and retain the right board members, executives and employees), Reward (design and live incentives), Report (engage in value reporting and communication), Realise (execute value generation), and Rethink (reflect critically on practice of all four of the other Rs). An effective board and a value-oriented executive management has a holistic view of all of these matters. 
  • Discussions around remuneration are typically static, that is, they are restricted to one year at a time. However, when dealing with a dynamic issue such as securing sustainable business performance, a dynamic approach is required. 
  • We present a simple strategic stock allocation concept for variable remuneration, referred to as STARS (Stock Awards for Right Strategy). This is a long-term incentive system that takes seriously the need for rewards for strategic goal achievement. Specifically, the core of this system entails, first, the selection and communication of specific annual targets in relation to the organisation’s strategic objectives and, second, using mainly share allocations to recognise the meeting of those targets, with just a relatively small proportion of cash rewards. STARS are a hands-on instrument for the board. They put the board’s role of leading the company into the future in the spotlight.
  • We also call for explicit analysis and disclosure of changes in the manager’s wealth position with respect to company shares. This provides a holistic view of how material outcomes (“pay”) and performance are linked. In short: Dynamic Disclosure Drives Dynamic Decisions.
The 5 Rs of value generation through effective governance and compensation design
Contrasting STARS and PSUs

Summary and Outlook

Simplicity is a virtue for compensation systems. Managers prefer simpler incentive systems; by contrast, they heavily discount the value of complex systems.  At the same time, incentive systems should explicitly incorporate the often neglected dynamic component in disclosure and discussion of outcomes. The STARS model achieves both of these aims. 

A rational and long-term focused remuneration system is a necessary, rather than a sufficient condition for value-generating corporate governance. The board and executives together must take a holistic view that tightly links the design of the remuneration system, the composition of the board and the executive, shareholder engagement, and value reporting.


Insights 2018, part 1

Presents key figures for the level of compensation of CEOs, other executives, chairs and other board members at the largest 100 Swiss listed companies.



Insights 2018, part 2

Offers, for the first time, a comparison of the level and development of executive and board pay in Switzerland and Germany.


Download in German


Insights 2018, part 3

Presents a new idea for linking equity-based (long-term) compensation with a focus on the achievement of strategic targets. This versatile method can be adjusted to the circumstances of each firm but is sufficiently general to allow straightforward communication to shareholders and other stakeholders.



Jose Marques

Director People and Organisation and Leader New world. New skills., Geneva, PwC Switzerland

+41 58 792 96 34


Contact us

Angela Bucher

Angela Bucher

Director, People and Organisation, PwC Switzerland

Tel: +41 58 792 43 16