2018 SHORT-TERM INCENTIVE TRENDS...166 Pakistan 173 Philippines 180 Singapore 187 South Korea 194...
Transcript of 2018 SHORT-TERM INCENTIVE TRENDS...166 Pakistan 173 Philippines 180 Singapore 187 South Korea 194...
SHORT-TERM INCENTIVE TRENDS2018
A 10 YEAR REVIEW — SAMPLE
Sample
TABL
E O
F C
ON
TEN
TS
4 MERCER'S GLOBAL PUBLICATIONS
5 INTRODUCTION 7 Report Structure
8 Reading the Report
13 SUMMARY OF KEY FINDINGS
15 How did the Recession Impact Short-Term Incentives?
22
Which Markets Experienced the Greatest (Positive Or Negative) Change in Post-Recession Short-Term Incentives?
29How do Actual Incentive Payouts Compare to the Targets Set Each Year?
31 AMERICAS
32 Argentina
39 Brazil
46 Canada
53 Chile
60 Colombia
67 Mexico
74 Peru
81 United States
88 Uruguay
95 Venezuela
222 EASTERN EUROPE, MIDDLE EAST, AND AFRICA
223 Bulgaria
230 Croatia
237 Czech Republic
244 Egypt
251 Hungary
258 Kazakhstan–Almaty
265 Morocco
272 Poland
279 Romania
286 Russia–Moscow
293 Serbia
300 Slovakia
307 Turkey
314 Ukraine–Kiev
321 United Arab Emirates
102 ASIA PACIFIC 103 Australia
110 China–Beijing
117 China–Shanghai
124 Hong Kong
131 India
138 Indonesia
145 Japan
152 Malaysia
159 New Zealand
166 Pakistan
173 Philippines
180 Singapore
187 South Korea
194 Sri Lanka
201 Taiwan
208 Thailand
215 Vietnam
328 WESTERN EUROPE
329 Austria
336 Belgium
343 Denmark
350 Finland
357 France
364 Germany
371 Ireland
378 Italy
385 Netherlands
392 Norway
399 Portugal
406 Spain
413 Sweden
420 Switzerland
427 United Kingdom
434 ABOUT THIS REPORT435 Methodology
439 Glossary
449 About Mercer
Sample
GLO
BAL
PUBL
ICAT
ION
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Stay ahead of today’s tight deadlines and competitive race for labor with these resources from the Mercer Insights Product Group. Covering local benefits, global compensation practices, and emerging HR policy trends, this portfolio contains all of the actionable data, insights, and guidance you need to steer your organization to success. Select a title to learn more about each of our industry-leading reports, or visit imercer.com/global for more information.
HEALTH & BENEFITS
Car Benefit Policies Around the World
Global Parental Leave Global Parental Leave — Industry Scorecard
LGBT Benefits Around The World
Worldwide Benefit & Employment Guidelines
Vacation and Other Leave Around the World
Vacation and Other Leave Industry Scorecard
Car Benefit Policies — Global Industry Findings
Severance Pay Policies Around the World
Severance Pay Policies Industry Scorecard
WORKFORCE & CAREERS
Global Compensation Planning Report
GCPR — 20 Year Look Back
Short-Term Incentives Around the World
Global Pay Summary International Geographic Salary Differentials
Workforce Turnover Around the World
STI Trends —A 10 Year Review
New Graduate Starting Salaries
HANDBOOKS & GUIDES
Compensation Handbook
Global Mobility Handbook
HR Guide to Doing Business
HR Management Terms
HR Atlas Asia Pacific HR Atlas Latin America
HR AtlasSample
4STI TRENDS — A 10 YEAR REVIEW — SAMPLE© 2018 Mercer LLC.
WHAT’ S IN A SHORT-TERM INCENTIVE?There are many forms of short-term incentives, but, generally, they are payment/payments made over a 12-month period associated with an individual, team, and/or corporate performance. Popular types of STI include bonuses, individual incentive plans, and team/unit performance incentives. They are frequently linked to profitability or revenue growth, and achievement of overall company goals determines the size of the company bonus pool. STIs are often capped at a fixed amount or percentage of annual base salary. By capping these payments, HR and business managers can prevent runaway expenses while achieving higher performance.
Short-term incentives are also responsive to market conditions. For instance, companies in highly competitive markets are more likely to offer generous STIs in order to drive employee and company performance, while those in stable or saturated markets may be less concerned with aggressive growth strategies.
A higher proportion of short-term incentive in an employee’s total cash compensation means higher flexibility in rewards. By linking those incentives to individual or company performance there is an opportunity to keep employees engaged, motivated, and rewarded, meet overall business objectives, and maintain overall salary budgets.
INTRODUCTIONRegardless of whether history repeats itself, there are important lessons to learn from the recent past. Between the historic shocks caused by the global financial crisis and prolonged uncertainty and recovery, the last ten years have given rise to innovative cost and talent management strategies.
Paying the right people, the right amount, for the right reason, and at the right time has become the norm of the day. Aligning the goals of the employee to that of company and keeping them motivated to achieve those goals is a common problem across businesses and regions.
Multinational corporations, small firms, and organizations around the world all face the same problem: motivating their employees to contribute to the collective group’s success.
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5STI TRENDS — A 10 YEAR REVIEW — SAMPLE
INTRODUCTIONCONSIDERATIONSHR and business managers should consider the following questions when creating a short-term incentive program:
► What types of employees would benefit most from STIs?
► Should I restrict the total value of STIs available to a single employee in one year?
► How should I discern between high-performing and low- performing employees when distributing STIs?
► What factors should I use when determining the impact an individual has on company success?
© 2018 Mercer LLC. Sample
© 2018 Mercer LLC. 6STI TRENDS — A 10 YEAR REVIEW — SAMPLE
REPORT STRUCTUREINTRODUCTION
Mercer’s 2018 Short-Term Incentive Trends — A 10 Year Review is a unique offering for HR and business managers around the world interested in learning how short-term incentive plans and payouts have changed over the last decade. This publication offers market-level data on the provision of short-term incentives for six distinct career levels, as well as the target and actual payout for this type of compensation. It also provides regional comparisons and ten-year trends to help decision makers understand what the future may hold and anticipate market changes.
The report collates data from 57 markets and offers a unique insight, critical to any business looking to devise a sound and competitive compensation program.
The report includes the following sections:
SUMMARY OF KEY FINDINGSThe section serves as an executive summary for those looking for Mercer’s insights and observations; it provides high-level trends, market comparisons, and other analysis. It aims to address the following questions:
► How did the recession impact short-term incentives?
► Which markets experienced the greatest (positive or negative) change in post-recession short-term incentives?
► How do actual incentive payouts compare to targets set each year?
REGIONAL RESULTSThe regional sections provide critical data to those looking to learn more about specific countries or markets. The regional sections are presented in geographical groupings, each of which contains market-specific information. The report divides the covered markets into the following regions:
► Americas
► Asia Pacific
► Eastern Europe, Middle East, and Africa
► Western Europe
ABOUT THIS REPORTThis section delineates the methods used in the report and lists key definitions.
► Methodology includes data sources used to compile this report, and other details on calculations and assumptions.
► Glossary provides definitions for many of the terms used throughout this report, as well as other HR related terms.
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7© 2018 Mercer LLC. 7STI TRENDS — A 10 YEAR REVIEW — SAMPLE
INTRODUCTION
READING THIS REPORTThe following pages include tips and guidelines to help navigate the report content.
EXECUTIVEDURING RECESSION VS. POST-RECESSION CHANGES
DU
RIN
GP
OS
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ARGENTINA UNITED STATES UNITED STATES
91.8%69.5%
37.3%16.4%
36.2%16.9%
VENEZUELA URUGUAY URUGUAY
ARGENTINA UNITED STATES UNITED STATES
91.8%69.5%
37.3%16.4%
36.2%16.9%
VENEZUELA URUGUAY URUGUAY
6 0.8% 2.7%-2.6% 5 5
HIGHEST AND LOWEST MARKETS
DU
RIN
GP
OS
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HONG KONG SINGAPORE JAPAN
85.2%38.6%
23.9%13.2%
23.0%17.0%
NEW ZEALAND NEW ZEALAND PHILIPPINES
HONG KONG SINGAPORE JAPAN
85.2%38.6%
23.9%13.2%
23.0%17.0%
NEW ZEALAND NEW ZEALAND PHILIPPINES
6 0.8% 2.7%-2.6% 5 5
HIGHEST AND LOWEST MARKETS
PO
ST
DU
RIN
GSWITZERLAND GERMANY GERMANY
89.9%58.5%
26.9%12.3%
27.1%14.9%
NORWAY FINLAND SWEDEN
SWITZERLAND GERMANY GERMANY
89.9%58.5%
26.9%12.3%
27.1%14.9%
NORWAY FINLAND SWEDEN
6 0.8% 2.7%-2.6% 5 5
HIGHEST AND LOWEST MARKETS
PERCENTAGE RECEIVING ACTUAL INCENTIVE TARGET INCENTIVE
AMERICASIMPACT OF RECESSION ON REGION OVERALL
ASIA PACIFICIMPACT OF RECESSION ON REGION OVERALL
DU
RIN
GP
OS
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SLOVAKIA SLOVAKIA SLOVAKIA
89.7%45.5%
22.6%14.4%
21.6%16.6%
SERBIA SERBIA ROMANIA
SLOVAKIA SLOVAKIA SLOVAKIA
89.7%45.5%
22.6%14.4%
21.6%16.6%
SERBIA SERBIA ROMANIA
6 0.8% 2.7%-2.6% 5 5
HIGHEST AND LOWEST MARKETS
EUROPE, MIDDLE EAST, AND AFRICAIMPACT OF RECESSION ON REGION OVERALL
WESTERN EUROPEIMPACT OF RECESSION ON REGION OVERALL
SAMPLE DATAData relating to "actual" incentives is orange. This is the market with the highest average actual STI payout (as a percentage of base salary) during the recession period.
Data relating to "target" incentives is blue. This is the difference between average target incentive payouts in the "during" and "post-recession" periods.
Data relating to the percentage of employees receiving an incentive is purple. This is the market with the lowest percentage receiving in the post-recession period.
The legend provides the color coding used in the graphic.
A regional summary page that compares recession to post-recession incentives is provided for each career level.
Sample
8© 2018 Mercer LLC. 8STI TRENDS — A 10 YEAR REVIEW — SAMPLE
INTRODUCTION
EXECUTIVETOP 3 MARKETS WITH THE GREATEST POST-RECESSION IMPACT
CHANGE IN PERCENTAGE RECEIVING CHANGE IN ACTUAL INCENTIVE CHANGE IN TARGET INCENTIVE
1COLOMBIA UNITED STATES UNITED STATES
6 -8.0% 5 8.2% 5 9.1%
2PERU URUGUAY URUGUAY
6 -8.0% 5 8.2% 5 9.1%
3VENEZUELA VENEZUELA CHILE
6 -8.0% 5 8.2% 5 9.1%
1NEW ZEALAND NEW ZEALAND NEW ZEALAND
6 -8.0% 5 8.2% 5 9.1%
2PHILIPPINES TAIWAN AUSTRALIA
6 -8.0% 5 8.2% 5 9.1%
3JAPAN SOUTH KOREA CHINA-BEIJING
6 -8.0% 5 8.2% 5 9.1%
1SLOVAKIA SERBIA CROATIA
6 -8.0% 5 8.2% 5 9.1%
2MOROCCO CROATIA UNITED ARAB EMIRATES
6 -8.0% 5 8.2% 5 9.1%
3ROMANIA UNITED ARAB EMIRATES BULGARIA
6 -8.0% 5 8.2% 5 9.1%
1AUSTRIA IRELAND SWITZERLAND
6 -8.0% 5 8.2% 5 9.1%
2IRELAND PORTUGAL PORTUGAL
6 -8.0% 5 8.2% 5 9.1%
3BELGIUM GERMANY IRELAND
6 -8.0% 5 8.2% 5 9.1%
AMERICAS ASIA PACIFIC
EASTERN EUROPE, MIDDLE EAST, AND AFRICA WESTERN EUROPE
This arrow indicates the market had a positive change; executives in New Zealand saw their actual incentives increase by +8.2%.
This graphic looks at how STI changed post-recession and whether the change was positive or negative. It provides the top three markets with the greatest change (both positive and negative) in percentage of employees receiving STI , as well as the greatest change in actual and target STI amounts.
This arrow indicates the market had a negative change; the percentage of executives in Slovakia decreased by -12.0%.
Portugal had the 2nd largest change in target incentive in Western Europe; the incentive target for executives increased by +9.1%.
SAMPLE DATA
Sample
9© 2018 Mercer LLC. 9STI TRENDS — A 10 YEAR REVIEW — SAMPLE
INTRODUCTION
AMERICAS ASIA PACIFIC EASTERN EUROPE, MIDDLE EAST, AND AFRICA WESTERN EUROPE
MANAGEMENT — SUPERVISOR & TEAM LEADER
PROFESSIONAL — EXPERIENCED
MANAGEMENT — MANAGER
PROFESSIONAL — SENIOR
PARA-PROFESSIONAL
-10%
-5%
0%
5%
10%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
AMERICAS ASIA PACIFIC EEMEA WESTERN EUROPE
EXECUTIVEACTUAL INCENTIVES VS. TARGET INCENTIVES
-10%
-5%
0%
5%
10%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
AMERICAS ASIA PACIFIC EEMEA WESTERN EUROPE
-10%
-5%
0%
5%
10%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
AMERICAS ASIA PACIFIC EEMEA WESTERN EUROPE
-10%
-5%
0%
5%
10%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
AMERICAS ASIA PACIFIC EEMEA WESTERN EUROPE
-10%
-5%
0%
5%
10%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
AMERICAS ASIA PACIFIC EEMEA WESTERN EUROPE
-10%
-5%
0%
5%
10%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
AMERICAS ASIA PACIFIC EEMEA WESTERN EUROPE
SAMPLE DATA
A line below the 0% axis indicates actual bonuses were lower than the targets set. The further from the axis, the greater the differential.
Each colored line represents a region. The legend provides the color coding used in the graphic.
This graph provides the difference between the target incentive set during one year to the actual incentive payouts for the following year. A graph is provided for each career level.
A line above the 0% axis indicates actual bonuses were higher than the targets set.
Sample
10© 2018 Mercer LLC. 10STI TRENDS — A 10 YEAR REVIEW — SAMPLE
INTRODUCTION
450STIAW — A 10 YEAR REVIEW© 2018 Mercer LLC.
MARKETOVERALL TREND INDICATOR
10 YR TREND 6 6 5
CAGR -0.2% -0.7% 1.5%
HIGH2008 2008 2017
94% 29.0% 30.7%
LOW2008 2008 2017
94% 29.0% 30.7%
EXECUTIVE MANAGEMENT — MANAGER MANAGEMENT — SUPERVISOR & TEAM LEADER
PROFESSIONAL — SENIOR PROFESSIONAL — EXPERIENCED
PARA-PROFESSIONAL
PERCENTAGE RECEIVING TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARYACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY
6 6 5
-0.2% -0.7% 1.5%
2008 2008 2017
94% 29.0% 30.7%2008 2008 2017
94% 29.0% 30.7%
6 6 5
-0.2% -0.7% 1.5%
2008 2008 2017
94% 29.0% 30.7%2008 2008 2017
94% 29.0% 30.7%
10 YR TREND 6 6 5
CAGR -0.2% -0.7% 1.5%
HIGH2008 2008 2017
94% 29.0% 30.7%
LOW2008 2008 2017
94% 29.0% 30.7%
6 6 5
-0.2% -0.7% 1.5%
2008 2008 2017
94% 29.0% 30.7%2008 2008 2017
94% 29.0% 30.7%
6 6 5
-0.2% -0.7% 1.5%
2008 2008 2017
94% 29.0% 30.7%2008 2008 2017
94% 29.0% 30.7%
SAMPLE DATA
The first page of the each set of market specific content provides a summary of the last 10 years.
The "High" indicates the year with the highest percentage receiving, actual incentive, or target incentive and the highest amount.
The "Low" indicates the year with the lowest percentage receiving, actual incentive, or target incentive and the lowest amount.
The 10 Year Trend provides the overall direction of the change in STI during the last decade.
The CAGR (compound annual growth rate) provides the magnitude of the change during the last decade
The actual and target incentive amounts are a percentage of base salary.
This amount is the percentage of employees receiving an incentive.
Sample
11© 2018 Mercer LLC. 11STI TRENDS — A 10 YEAR REVIEW — SAMPLE
INTRODUCTION
451STIAW — A 10 YEAR REVIEW© 2018 Mercer LLC.
PERC
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PERC
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BASE
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PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY
EXECUTIVE TRENDS
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE 10 10 10 10 10 10 10 10 10 10 10
ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY 10 10 10 10 10 10 10 10 10 10 10
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY 10 10 10 10 10 10 10 10 10 10 10
MARKET
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
0
20
40
60
80
100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Each set of market specific pages include detail for each career level.
Figures for each year can be found in the table below the graph.
The actual (orange line) and target (blue line) are aligned with this axis and represent a percentage of base salary.The purple area of
the graph represents the percentage of employees receiving an incentive and is aligned with this axis. SAMPLE DATA
Sample
REG
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REGION
Sample
© 2018 Mercer LLC. 13STI TRENDS — A 10 YEAR REVIEW — SAMPLE
MARKETOVERALL TREND INDICATOR
10 YR TREND 6 6 5
CAGR 2.1% 2.1% 2.1%
HIGH2008 2008 2017
90% 30.0% 30.0%
LOW2014 2015 2011
70% 20.0% 20.0%
EXECUTIVE MANAGEMENT — MANAGER MANAGEMENT — SUPERVISOR & TEAM LEADER
PROFESSIONAL — SENIOR PROFESSIONAL — EXPERIENCED
PARA-PROFESSIONAL
PERCENTAGE RECEIVING TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARYACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY
5 6 5
2.1% 2.1% 2.1%
2008 2008 2017
90% 30.0% 30.0%2014 2015 2011
70% 20.0% 20.0%
5 6 5
2.1% 2.1% 2.1%
2008 2008 2017
90% 30.0% 30.0%2014 2015 2011
70% 20.0% 20.0%
10 YR TREND 5 6 6
CAGR 2.1% 2.1% 2.1%
HIGH2008 2008 2017
90% 30.0% 30.0%
LOW2014 2015 2011
70% 20.0% 20.0%
6 6 6
2.1% 2.1% 2.1%
2008 2008 2017
90% 30.0% 30.0%2014 2015 2011
70% 20.0% 20.0%
6 6 6
2.1% 2.1% 2.1%
2008 2008 2017
90% 30.0% 30.0%2014 2015 2011
70% 20.0% 20.0%Sample
PERC
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PERC
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PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY
© 2018 Mercer LLC. 14STI TRENDS — A 10 YEAR REVIEW — SAMPLE
EXECUTIVE TRENDS
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE 90 90 90 90 90 90 90 90 90 90 90
ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
MARKET
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
0
20
40
60
80
100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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PERC
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PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY
MANAGEMENT — MANAGER TRENDS
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE 90 90 90 90 90 90 90 90 90 90 90
ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
0
20
40
60
80
100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
MARKET
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PERC
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PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY
MANAGEMENT — SUPERVISOR & TEAM LEADER TRENDS
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE 90 90 90 90 90 90 90 90 90 90 90
ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0
20
40
60
80
100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
MARKET
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© 2018 Mercer LLC. 17STI TRENDS — A 10 YEAR REVIEW — SAMPLE
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PERC
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PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY
PROFESSIONAL — SENIOR TRENDS
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE 90 90 90 90 90 90 90 90 90 90 90
ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
0
20
40
60
80
100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
MARKET
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PERC
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PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY
PROFESSIONAL — EXPERIENCED TRENDS
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE 90 90 90 90 90 90 90 90 90 90 90
ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
0
20
40
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
MARKET
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PERC
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PERC
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PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY
PARA-PROFESSIONAL TRENDS
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PERCENTAGE OF EMPLOYEES RECEIVING INCENTIVE 90 90 90 90 90 90 90 90 90 90 90
ACTUAL INCENTIVE AS A PERCENTAGE OF BASE SALARY 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0
TARGET INCENTIVE AS A PERCENTAGE OF BASE SALARY 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
0.0
2.0
4.0
6.0
8.0
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12.0
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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ABOUT THIS REPORT
Sample
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STI TRENDS — A 10 YEAR REVIEW — SAMPLE
ABOUT THIS REPORTThis section provides information on the methods of collecting, collating, and analysing data for this publication. Below are notes on exceptions and exclusions in the data and a list of data sources and relevant equations. Readers will also find a glossary of key terms.
METHODOLOGY
The following statistics are presented in this publication:
► Compound Annual Growth Rate (CAGR): The year over year growth rate applied to an investment or other part of a company's activities over a multiple-year period. The formula for calculating CAGR is (Current Value/Base Value)^(1/# of years) - 1. It is essentially a number that describes the rate at which an investment would have grown if it had grown at a steady rate.
► Percentage employees receiving: Number of employees receiving the incentive divided by number of total employees
► Median: The data point that is higher than 50% of all other data in the sample when ranked from low to high. Also known as the 50th percentile.
► Average: The sum of all data reported divided by the number of data observations in the sample. Also known as the mean.
► N: The number of companies that reported data for the statistic.
► Endash or “–”: The sample is too small to provide the statistic.
STATISTICS
Sample
ABOUT THIS REPORT
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DATA MASKINGTo ensure the confidentiality of all companies that provide data to Mercer’s surveys, statistics have been “masked” by displaying an endash or “–” when minimum sample sizes are not met.
► A minimum of three data points are required to report the average and prevalence percentages.
► A minimum of four data points are required to report the median.
DATA ANALYSISThis publication uses job-level STI data sourced from Mercer’s Total Remuneration Surveys (TRS) to calculate STI prevalence rates, STI actual incentives (as a percentage of base salary), and STI target incentive (as a percentage of base salary).
► Organisation-weighted average data are used to calculate the STI prevalence rates and STI actual and target incentives as a percentage of base salary for the years 2016 and 2017. Previous to these years incumbent weighted data were used to calculate the STI prevalence, actual and target payouts.
► Averages are calculated using the number of observations of annual base salary with a threshold value greater than or equal to eight organisations.
► Throughout the report, the “target” is the expected STI percentage for the current performance year, while “actual” is the STI amount paid for the most recently completed performance year.
► The “percentage receiving” indicates the percentage of all employees that received a short-term incentive.
DATA SOURCES ► The data for all markets are calculated using Mercer's Total Remuneration Survey.
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EXCEPTIONS AND NOTESData may vary when compared to previous year for the following reasons:
► The sample of participating companies within a single market may be different from one year to the next.
► The data presented in the report are calculated using the Mercer's Global Benchmark Jobs. Due to variations in data availability year over year, there may be an impact on the final STI data presented.
► It is also important to note that within a sample, a significant amount of data may be reported by one organization, which might vary from year to year.
► Data may change drastically from year to year due to industry-related factors and economic conditions.
AMERICAS ► In Brazil, STI data include both bonus and profit-sharing information.
► For the years 2016 and 2017, the base salary in Colombia represents annual guaranteed cash; therefore the actual and target incentives are a percentage of annual guaranteed cash (not base salary). Prior to 2016, annual base salary was used for the calculations.
► Separate sets of global benchmark jobs were used for Latin America and North America regions to calculate job family and market-level data.
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ASIA PACIFIC ► For the years 2016 and 2017, annual guaranteed cash is used as annual base salary for India; therefore the actual and target incentives are a percentage of annual guaranteed cash (not base salary). Prior to 2016, annual base salary was used for the calculations.
► In Australia and New Zealand, the percentage receiving STI calculation for 2017 is based on the number of incumbents receiving an incentive, divided by the number of incumbents for which "employment cost" data was provided. This calculation differs to previous years; use caution if comparing this year's analyses to previous publications.
► Data for China represent the cities indicated in the report, not countrywide trends.
EUROPE, MIDDLE EAST, AND AFRICA ► Data for Kazakhstan, Russia, and Ukraine represent the cities indicated in the report, not countrywide trends.
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ABOUT MERCER At Mercer, we make a difference in the lives of more than 110 million people every day by advancing their health, wealth, and careers. We’re in the business of creating more secure and rewarding futures for our clients and their employees — whether we’re designing affordable health plans, assuring income for retirement, or aligning workers with workforce needs. Using analysis and insights as catalysts for change, we anticipate and understand the individual impact of business decisions, now and in the future. We see people’s current and future needs through a lens of innovation, and our holistic view, specialized expertise, and deep analytical rigor underpin each and every idea and solution we offer. For more than 70 years, we’ve turned our insights into actions, enabling people around the globe to live, work, and retire well. At Mercer, we say we Make Tomorrow, Today.
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