The salary gap in the first German stock exchange league has narrowed significantly for the first time in years, but is still huge.

Board members of the 40 Dax companies earned on average 38 times as much as an average employee in their company in 2022, according to an evaluation by the German Protection Association for Securities Ownership (DSW) and the Technical University of Munich. In the previous year, the top managers had come up to 52 times.

In the years 2014 to 2022, the salary gap was in a range of 48 and 54. Professor Gunther Friedl from the Technical University of Munich explains the recent decline with increased personnel expenses per employee and the reduced remuneration of the board of directors.

On average, a member of the board of directors – including the heads of the group – received 3.34 million euros, 8.4 percent less than a year earlier, although the groups’ profits and sales had risen overall.

The management level of the Dax companies felt, among other things, the price falls on the stock exchanges as a result of the Russian war of aggression in Ukraine. Part of the Management Board’s remuneration is variable and linked to the development of the company’s share price. The leading German index, the Dax, lost 12.3 percent over the year as a whole. “Moreover, in the case of non-share-based parts of the remuneration, the sometimes demanding targets were increasingly not achieved,” explains Friedl.

Significant differences between CEOs and board members

On average, a CEO came to 5.1 million euros (2021: 6.1 million) and thus significantly more than a simple board member with an average of 2.9 million euros. The fixed salary as well as short and long-term variable remuneration are included.

According to the study, the front runner was Deutsche Bank boss Christian Sewing with a total remuneration of 9.2 million euros, followed by VW boss Oliver Blume with 8.8 million euros. Blume earned an additional 0.5 million euros as CEO of Porsche AG. According to the data, Merck boss Belen Garijo came in third place with 8.3 million euros.

According to DSW Managing Director Marc Tüngler, “the 10 million euro mark is still being established in Germany as an absolute cap” for the salary of the Dax CEO. “The social debate and co-determination are having an impact.” In the past, earnings of more than 10 million euros had caused massive criticism in this country.

The competition for the brightest minds doesn’t stop at the national border, said Tüngler. But “so far we have not really seen that we are suffering a structural disadvantage here in Germany because the remuneration in Germany is not necessarily as exorbitant as we sometimes see abroad.”

Salaries in Germany much lower than abroad

According to the study, not a single CEO in the USA earns the equivalent of less than 10 million euros in the Dow Jones Index. There, the mark of 100 million dollars was almost reached. Apple CEO Tim Cook received $ 99.4 million (94.5 million euros). On average, the group leaders came to around 24.9 million euros in 2022.

Even in a European comparison, the remuneration of the Dax bosses seems almost modest in some cases. According to the analysis, the head of the French software company Dassault Systèmes, Bernard Charlès, stands out here with around 32.9 million euros. “An amount that cannot be represented in Germany these days,” says DSW expert Christiane Hölzl.

In addition to differences in the remuneration structure, risk and liability also play a role. “The risk of a board member abroad is significantly higher,” explained Tüngler. In the current year, the executive board remuneration of the Dax companies is likely to remain unchanged or fall slightly. “The business models of the companies are under pressure and the costs are running away,” says Tüngler.

There are various studies on executive board remuneration, the results of which sometimes differ from one another due to different calculation methods. The DSW has been presenting the evaluation regularly since 2000.