New Online Compensation Database by Neumann International
he annual total cash compensation of a Managing Director in an international company in Hungary is 116,500 Euros gross an average. This amount includes a base salary of 85,500 Euros plus an annual bonus of 31,000 Euros.
This is one of the key result of the current salary survey of Neumann International, displayed in the new online compensation database www.neumann-compensation.com. The database contains salary information from 1,857 employees in 68 companies in Hungary in 66 management and specialist functions.
“Salaries for Managing Directors in Hungary usually range from 50,000 to more than 250,000 Euros”, says Conrad Pramboeck, Head of Compensation Consulting at Neumann International. These large differences in compensation can be explained by different areas of responsibility. “Executives in large companies generally earn higher salaries than managers in smaller ones”, says Pramboeck.
Salary increases were 6,2 % on average in Hungary and are expected to be around 5,8 % in the next 12 months. In addition, a better performance of a manager also reflects in his annual bonus, which on average amounts to 30 to 40 % of his base annual salary on top at the end of the year.
A company car is usually part of a remuneration package for a Managing Director. The most common car models are Volvo and Audi A6. The average budget is 45,000 Euros with average yearly costs of 10,000 to 15,000 Euros.
From an international point of view, salaries in Hungary are still below average. The highest salaries in Europe are paid in the United Kingdom, Switzerland and Germany, where top executives in big groups can earn several million Euros per year. Substantially lower salaries than in Hungary are paid in Southeast Europe, like Bulgaria and Romania.
Compared to other European countries we expect another minimum 10 to 15 years until the salary levels in Hungary will have reached a level when offshoring will be no longer interesting.
This, of course, is a rule of thumb and depends on several other factors. One of these factors is the duration of the investment. Production facilities usually have a life cycle of 20 to 50 years. Pulling out of a country before the end of this period is economically not justified. The services industry (e.g. software development) has much shorter life cycles and moves faster. The greatest competitors for offshoring in the few years and decades will be in India and China.
At this stage, Hungary is still one of the most interesting places in Europe to invest due to the size of the market (unlike other countries in Southeast Europe), the lower labour cost (compared to Western Europe) and the geographic closeness to western Europe (unlike India and China).
For more information please visit www. neumann-compensation.com.
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