It seems like the inflation of executive salaries in Brazil has established itself as a global trend. According to a wage survey of 23 countries by recruitment firm Robert Walters, since last year, the compensation of senior management professionals in Brazil has surpassed some of the major markets like New York, Paris and Shanghai, and grows at an average of 10% per year.

The gap between Brazil and other countries is wider in higher level positions such as Chief Financial Officer (CFO), with the Brazilian being second only to those in London, for instance. “But when it comes to the total compensation cost, a CFO in Brazil is more expensive than in England,” says Frederic Ronflard, operations director at Robert Walters. A calculation made by the consultancy firm reveals that, including labor costs and taxes (part of the “Custo Brasil”), the Brazilian CFO costs a company US$ 393,000 per year, equivalent to 40% more than his actual salary. On the other hand, in London this total cost is US$ 379,000, including the 22% government fees.

Here is a comparison table (via Valor) that shows the financial executives (actual) salaries in different cities:

The survey also showed, however, that the compensation increase at double-digit rates did not occur only in Brazil. China, for instance, saw wage inflation surpassing 20% in some positions. “This is a phenomenon occurring in economies that suffer from the lack of qualified people,” says Ronflard. Brazil, China and Australia recorded the highest increases in salary when compared to 2011. The vast majority of countries surveyed has kept wages at the same level of last year. In the UK, there was a drop of 5% in executives’ income.

This jump in compensation figures, however, should be viewed with concern. “In time of crisis or stabilization, downsizing tends to hit those with high wages that do not perform,” says Ronflard, who sees a slowdown in income increases in the medium term.

He said the increasing number of foreigners working in Brazil should help to contain this process. “The multinationals compare the cost of transferring a European executive to Brazil with the salary of a local executive. The cost-benefit ratio is often favorable to the foreigner,” he says.

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