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UK chief executives earn less than half of US CEOs' pay     Top British chief executives are paid less than half as much as their US counterparts, according to new research from global management consultancy Hay Group reveals. Total pay packages* for top UK chief executives typically amount to close to €6m** according to the study – but are almost €13m in the US, some two and half times higher. Although the market capital of these US companies is, on average, around 40% bigger than the Europeans, the size difference alone cannot explain the pay gap.    British chief executives are the second best rewarded in Europe, according to Hay Group's findings – just behind their French counterparts.    The Hay Group report, How chief executives are paid, compares the level and structure of chief executives' packages shown in the published accounts of 100 of the largest companies in     Europe and the US.    The report also reveals a striking contrast in apparent approaches to rewarding performance. While British and mainland European packages provide a broadly even balance between base salary, annual bonuses and long-term incentives, US companies deliver much more of the CEO's package through annual bonuses and share-based, long-term incentive arrangements.       Europe versus US    In a typical package, the value of bonuses and long-term incentives substantially exceeds that of base salary, significantly bolstering chief executives’ pay. However, the amount and balance of these incentives vary greatly between countries.    Hay Group's research finds that base pay for top chief executives is typically more than 20% higher in Europe than in the US – €1.3m compared     to €1.07m. However, bonuses and other incentives are much lower. Top American bosses gain significantly better overall pay as a result.       UK highlights    UK companies pay the highest base salaries – typically €1.4m – followed by the French at €1.25m. British companies in the study pay the second highest bonuses at 1.6 times salary or close to €2.2m, behind German firms, which pay bonuses approaching two times salary.    Long-term incentives in the UK are among the lowest of the countries studied, at 1.35 times basic salary, or €1.9m additional pay. French companies provide the highest long-term incentives – typically 2.7 times salary – and also pay the highest overall chief executive packages in Europe at almost €5.9m.    Simon Garrett, director of executive     reward at Hay Group and author of the report, commented: "Chief executive compensation is a great deal lower in Europe than in the US as a direct result of the substantially larger bonuses and share-based, LTI awards made by American companies. But it would be simplistic to suggest that US CEO packages are therefore more focused on rewarding long-term performance.    "Historically, US tax and accounting rules held down base salaries and discouraged LTIs driven by hard-edged performance conditions. As a result, US CEOs' bonuses and LTIs grew and were often really about delivering more pay than motivating them to perform.    "By contrast, shareholder activism in Europe (and particularly the UK) has meant that the values of many European LTI awards have been reduced by tougher performance conditions. This sentiment seems to be spreading and I think     US shareholders and regulators are now starting to demand more bangs for the LTI bucks.    "Of course, in a highly volatile market the values of incentive programmes are harder to judge. Share options, commonly used in the US and France, can be valueless if share prices fall far enough. However, performance shares, more common in the UK, can shine for chief executives that preserve more shareholder value than their peers."       * i.e. base salary, annual bonus and long-term incentives such as stock options but excluding pensions which cannot be valued reliably using published data.       ** For consistency all data was converted into Euros at exchange rates applying at September 2007.

Indian IT services vendors face new UK challenges     The top five Indian IT services suppliers will double their share of the UK software and IT services market by 2011, but they will face some new challenges as they bid for larger and more complex contracts.    India's top five services companies: TCS, Infosys, Wipro, HCL and Satyam; are on course to grow their share of the fragmented UK software and IT services sector from under 3% to 7% over     the next three years, according to a new report from consulting group Pierre Audoin Consultants (PAC), a European market research and strategic consulting firm for the software and IT services industry.    During this time, at least one of the leading Indian vendors will have surpassed £1bn in annual revenue from the UK, and in doing so, will have become one of the country’s top 10 SITS     suppliers.    In the last 18 months, UK companies including Carphone Warehouse, DSG and Skandia have all committed to £100m+ contracts with Indian service providers. However, in order to continue to secure deals of this magnitude, the vendors will have to demonstrate that they can execute staff transfer deals, manage sub-contractor and local partner networks, as well     as combat the steady erosion of their price advantage by rising domestic labour costs.    Nick Mayes, senior consultant at PAC, said: “Low prices are no longer the only weapons in the armoury of the Indian services vendors, and they are winning business against Western suppliers on the quality and depth of their offerings.    "But if they are to become major players in areas such as     infrastructure outsourcing, they will need to prove their ability to successfully handle the TUPE transfer of staff from the client, which is an area where the likes of IBM and EDS carry far greater experience."