Corporate biggies in GCC are wooing chief executives from companies in the West with lucrative options such as hefty joining bonuses and buying out longer notice periods, amidst rising demand for top-level talents to manage aggressive business expansion plans in the region.
In case of chief executives and CXOs from listed companies, the offers range from phantom stocks or equity in cases of private companies, hiring experts said.
Corporate bosses from the West are being chased for heading new business initiatives or to turnaround existing businesses in the GCC region.
The second or third generation, who are currently at the helm of many of the family-owned businesses in the region, are also keen to lure top executives from the West to steer their company’s direction from traditional approaches to embracing the global best corporate governance models for their transformational growth.
“Regional and local conglomerates [in GCC] have grown significantly to inorganically pave the way for induction of fresh leadership talent for their new business initiatives and also to support turning around existing businesses,” Amarjeet Dutta, Partner, EMA Partners – Middle East, a leading global leadership search and consultancy, told Arabian Business.
“We have been observing that companies are buying longer notice periods and neutralising money being left on the table through attractive joining bonuses,” Dutta said.
Dutta said for CXO level candidates from listed companies in the West, who would perhaps lose stock options and future wealth, there is a tradeoff between the opportunity cost of the new role and some creative counter mechanisms that the new employer offers.
“Phantom stocks and equity in cases for private companies are among the counter offers on the table for such candidates,” Dutta said.
“The OTE (opportunity to earn) and OTL (opportunity to learn) are two areas that most logical and practical leaders look at in their next role – not either or,” he said.
A phantom stock – also known as shadow stock – plan is an employee benefit plan that gives senior management executives many of the benefits of stock ownership without actually giving them any company stock.
Even though it is not real, the phantom stock follows the price movement of the company’s actual stock, paying out any resulting profits.
Corporate insiders said the ‘special package offers’ seem to be working as many CEO and CXO level executives have been signing up for corner room roles with some of the leading and diversified groups in GCC.
A flurry of large-scale employee firings and apprehensions of looming recession in the West is also adding to this lure.
The GCC region has seen a 32 percent jump in hiring at leadership levels in the recent months, according to talent search firms.
Key leadership hiring is witnessed across sectors and is expected to continue into the near future on the back of strong tailwinds for business growth, coupled with aggressive policy and incentive tools offered by some of the regional governments.
UAE and Saudi Arabia are seeing the maximum inflow of top talent, hiring firms said.
“Family-owned businesses make up the majority of the companies in the Middle East, the UAE in particular. As these companies are now matured enough in their multiple decades of life cycle, their second or third generation is now at the helm usually steering their transformational growth,” Ahmed Siddiq, COO of TCT Enterprise (formerly Telephony Group), told Arabian Business.
“That’s when bringing expert professionals and seasoned senior executives from the West matters the most. It helps these companies to consolidate their business units, optimise operational efficiency and so on,” said Siddiq, whose family-owned business has been operating in the region for more than 70 years.
“This is also a major reason for the trend we are seeing now such as offering equity stakes or profit sharing mechanisms to attract and retain these talents – similar to startups Employees Stock Option Pool,” Siddiq said.
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