By Andy Sambidge
New study shows 25% of salary paid in bonuses, profit share - 7th highest globally.
Middle managers in the UAE receive a high proportion of their earnings in the form of bonuses and profit share, compared to international standards, a new study reveals.
The findings are part of an analysis by leading global consultants Watson Wyatt that shows the differing patterns of "at risk" pay across 57 countries.
The average actual bonus and profit share as a proportion of base pay for UAE middle managers is 25 percent, which is the seventh highest globally, according to Watson Wyatt's latest Global 50 Remuneration Planning Report.
Actual bonuses and profit share make up on average 36 percent of base pay for senior executives in UAE companies (the 13th highest in the world).
However in other countries it is considerably higher; for example, Greece (55 percent), Luxembourg (51 per cent), Brazil (50 percent), Saudi Arabia (46 percent), the UK (45 percent) and the US (45 percent).
Actual bonuses and profit share as a proportion of base pay are lower for more junior staff in UAE at 12 percent. Out of the 57 countries in the Watson Wyatt report, this ranked the UAE 15th.
"Bonuses and profit share have become a more important element of the overall reward package in most countries in recent years," said Anne G. Severeyns, a senior consultant at Watson Wyatt.
"However, there are marked differences in the size of 'at risk' pay compared with base pay from country to country as well as differences in the weight given to 'at risk' at different job levels.
"At Watson Wyatt we believe that variable pay, and in particular incentives, offer organisations a number of opportunities to manage cost and performance at a time when budgets may be tight."
She added: "In particular, it enables organisations to focus limited annual review budgets on those individuals who provide the most value to the business.
"It can also be a retention tool for keeping top talent and drive the right behaviours from employees."