As an industrial group, Cie Automotive is renowned for its high-value processes. In the 2023 financial year, their CEO, Jesús María Herrera, was the highest paid executive among all companies listed on the Spanish stock market. He earned an astounding 23.77 million euros in recognition of his dedication and achievements as a leader. However, despite being a standout example, wage inequality remains rampant in many companies both domestically and abroad.
Cie Automotive’s case is particularly concerning as it highlights the gap between executives and staff salaries. According to data from EL PAÍS’ remuneration report for companies listed on the stock market, Cie Automotive’s top executives earn an average of 4.71 million euros per year, which is 77.6 times more than their average employee salary. The trend of increasing executive salaries has become increasingly common in recent years, with senior management enjoying higher payouts than non-executive employees.
Indra, Inditex, Banco Santander, and Sacyr are just a few examples of companies that follow Cie Automotive’s lead when it comes to compensation schemes and director remuneration. Despite efforts to address this issue in the past decade, wage inequality has persisted and continues to be a significant concern for many stakeholders in various sectors across Europe and beyond.
The debate around compensation schemes and director remuneration remains a hot topic in corporate governance circles today. While many companies have begun to incorporate pension contributions into their salary plans for executives, others still rely heavily on cash payments. Additionally, golden parachutes – exit clauses designed to provide executives with lucrative severance packages – continue to be prevalent among large corporations on the stock market.
Despite some progress towards limiting excessive compensation for executives and addressing termination payments issues such as golden parachutes, much work remains to be done before wage inequality can be effectively addressed at scale across industries worldwide
