Large differences in the level and transparency of salaries in the top management of public companies

Friedrichshafen. What is earned in management and board positions in public companies often remains hidden. Just 20.3 percent of top management members at municipal level disclose their remuneration on a personal basis, compared to 42.2 percent at federal and state level. At the same time, salaries vary considerably depending on the sector and company size. This is according to the recently published Public Pay Study 2024 by Zeppelin University (ZU).

The Public Pay Study is designed as a long-term study and examines current patterns in the level, structure and disclosure of top management remuneration at public companies and highlights prospects for digital governance and sustainable remuneration structures. The study examined 10,649 top management members from 7,177 public companies in cities with a population of over 30,000, rural districts and federal and state governments. Remuneration data for 2,046 individuals from 1,157 public companies was identified.

Among the municipalities with at least five public companies, two municipalities have a personal disclosure rate of 100 percent for the 2022 financial year. For a further six municipalities, it is at least 75%, and for 28 municipalities between 50% and 75%. In contrast, a considerable 239 municipalities still have a remuneration disclosure rate of 0%. Public service broadcasting has now reached 94.9%, but many other areas still do not achieve this level of transparency.

There are also clear differences in the remuneration levels of top management members of public companies. The study shows that 42.6 percent of top management members receive remuneration of less than 150,000 euros. While 43.2 percent receive between 150,000 and 300,000 euros, 13.7 percent receive more than 300,000 euros and 3.1 percent receive over 500,000 euros. At 1.6 percent, the remuneration of top management members of savings banks has increased significantly more than in the "municipal utilities, energy & water supply" sector, for example, although the remuneration level at savings banks was already the highest of all sectors.

"In the discussion about trust in the state, the findings highlight the urgent need to promptly introduce transparency laws and public corporate governance codes with clear regulations everywhere. Complete remuneration transparency, including often controversial pension schemes, must be established and remuneration must be discussed in the peer group. Fair pay and no envy debates are needed across the board," explains Professor Dr. Ulf Papenfuß, holder of the Chair of Public Management & Public Policy at ZU.

The "Public Pay Study 2024: Top management remuneration at public companies: Perspectives for Digital Governance and Sustainable Compensation Structures" was prepared together with LAB & Company Düsseldorf GmbH, who supported the study in discussing the topic in practice.

The complete study is available for download at puma.zu.de