Executive board members of DAX companies earned around six percent more in 2023 than in the previous year. This is the result of the annual study by Professor Dr. Gunther Friedl, TUM School of Management, and the DSW, a lobby group for private investors. Despite many crises, the DAX has shown a positive long-term performance, which has also had an impact on managers' incomes.

In 2023, the executive board members of the 40 companies represented in the German stock index (DAX) earned an average of 3.6 million euros, 5.8% more than in the previous year. In 2022, managers had seen a significant drop of 8.4 percent.

On average, board members earned 40 times as much as their employees. The pay gap within companies thus widened slightly.

Executive compensation consists of several components: About 32% was fixed. About 43% was linked to targets set for at least three years, such as share price performance. Bonuses linked to short-term targets accounted for about 25%.

"For German companies, the year was characterized by ongoing geopolitical tensions and macroeconomic challenges due to high inflation, restrictive monetary policy and the energy crisis," said Prof. Gunther Friedl, Chair of Controlling at TUM. "Despite these challenges, the DAX has managed to perform positively."

As the index curve also points upward over several years, the long-term compensation of board members also increased (up 5.7%). However, short-term compensation (up 6.2%) and fixed compensation (up 5.8%) also increased.

CEOs earn more abroad

CEOs earned an average of 5.7 million euros, up from 5.1 million euros a year earlier. However, their salaries are still low by international standards. CEOs of non-German companies listed in the EuroStoxx 50 stock index received an average of €6.9 million, while CEOs in the US Dow Jones index received €24.2 million.

The study also examines how transparent companies are in disclosing payments to their board members. Marc Tüngler, Managing Director of DSW, explains: "Transparency in the compensation of top managers is important. It has a lot to do with credibility and comprehensibility. The transparency of executive compensation in DAX companies is nominally at a good level.

All companies disclose compensation at the individual level. Most companies also provide comprehensive information on the assessment basis. However, there is a lack of comparable presentation across all companies. This is mainly due to the abolition of the Code tables and legal changes that give companies a great deal of freedom in their presentation. What is missing is a standardization of the reports that would allow comparisons to be made without too much effort.

To the study.