OREANDA-NEWS. January 16, 2007. PricewaterhouseCoopers presented the results of the Ninth Annual Financial Sector Compensation Survey that show the main trends in the compensation market for the period from 1 June 2006 to 1 June 2007, reported the press-centre of PricewaterhouseCoopers.

According to the survey, the number of companies that made transition to payment in roubles is 27. Therefore, about 90% banks establish salaries to their staff in roubles while in the previous year only about half of the banks expressed salaries in employment contracts in roubles, and two or three years ago the majority of banks expressed salaries in dollars.

Our comparative analysis of compensation data shows that, compared to last year, in Moscow base salaries (expressed in dollar equivalent) increased by 18%. It should be noted that salary increase was influenced by fall of exchange rate of the United States dollar and the Russian rouble during the last year. 4% of the increase is attributed to strengthening of Russian rouble, therefore average salary increase was about 14%. In the regions this increase was 12-14% on the average.

The survey also indicates significant bonus increase, which resulted in average growth of total compensation by 27%.

In the environment of tough competition employers broaden the range of retaining tools. This year, six participants introduced private pension plans and as a result of that the total number of companies that provide this benefit to staff is 16. Four more respondents are planning to introduce private pension plans in the coming year. The vast majority of companies use pension schemes with defined contributions, which agrees with recent international practice trends.

In recent year, long-term incentive plans were becoming more and more popular. As a rule, in the banks top and middle management are eligible for these plans, while some banks offer such plans to professional and support staff as well. 21 companies reported that they provide long-term incentive plans to top and middle management, which equals to one-third of participants. Four more banks are planning to introduce long-term incentive plans in the following year. This indicates that long-term incentives are gradually becoming a mandatory component of top manager’s compensation package in the Russian market. As in the previous year, the most popular long-term incentives are stock options, deferred bonus, restricted shares and phantom shares.

Overall trend in the relationship between base salary in Russian and foreign banks persists: on the average, in Russian banks salary is lower than in foreign banks. However, this observation is probably more relevant to lower levels of the hierarchy. For example, non-management employees in Russian banks are paid 22% less on average than in foreign banks (base pay). However, starting from the level of line manager base salaries are practically equal, and at the level of Board Deputy Chairperson/Member base salaries in Russian banks are on the average 26% higher than in the foreign ones.