It is perhaps surprising that in a community as small as that of reinsurance CEOs, there is a marked diversity in how the industry's top people are compensated. As one of the largest global firms carrying out CEO searches for the reinsurance industry, Russell Reynolds is uniquely positioned to observe the global variations in CEO compensation. Interestingly, there is really no global standard by size of company or number of employees, although within each country's marketplace there is a broadly similar level of expectation. Nevertheless, the make-up of each CEO's compensation varies dramatically.

For example, in a few companies, the CEO is only paid a base salary and cash bonus. This, however, is not the norm, and most expect to be granted a portfolio of shares and share options on top of their cash compensation. Reflecting the trend towards reinsurance carriers becoming part of multinational financial services businesses, some CEOs now have share options in the parent companies rather than the reinsurers. In addition, many are offered a significant portfolio of benefits, ranging from car allowances and subsidised mortgages to life insurance, sophisticated pension plans and even allowances for drivers. It is more unusual – but not exceptional – that CEOs also negotiate housing allowances, travel allowances and significant signing-on bonuses and long-term contracts from their companies.

The level of a CEO's compensation and the market share of the employer do not go hand in hand. Often it is the smaller specialist reinsurers which pay proportionally higher compensation, though this is not wholly unexpected as these companies are, more often than not, located offshore. What is also clear is that reinsurance CEOs are increasingly being tempted to relocate overseas by the rewards on offer. Russell Reynolds has been able to move senior reinsurers from one country to another, based upon the dual benefit of a more interesting and more challenging role as well as the chance to create substantial wealth.

And the reinsurers themselves have shown an increasing propensity to search for their CEOs internationally. We have sourced CEOs for Bermudian reinsurers from both the UK and US industries, and there are a number of European CEOs on the island. CEOs are increasingly spending a lesser proportion of their time in Bermuda and the remainder travelling to the US and Europe, as their businesses are more and more internationally based. This flexibility has increased Bermuda's attractiveness yet further for CEOs.

Differentials between CEOs' compensation in the reinsurance marketplace has widened during the last decade. Continental Europe remains the least well paid territory, graduating up through the UK, then Bermuda and finally peaking in the US. Unsurprisingly, Lloyd's offers the greatest rewards within the UK market but in general is still seriously lagging the US and Bermuda. Geographically speaking, a CEO can increase his compensation by moving from east to west, but this is not always the same with senior reinsurance professionals below the level of CEO, who are likely to do better in Lloyd's or in Bermuda, particularly bearing in mind the tax advantage in Bermuda, where personal taxation is less than 13%.

Finally, it is important to note that the reinsurance industry has to date not made much effort to bring in CEOs from outside the business. This is quite surprising given the competitive nature of the industry, the fight for a limited pool of top-level talent and the increasing convergence of reinsurers and capital markets. Perhaps in the near future recruiters will be more regularly challenged with bringing CEOs into the reinsurance industry from outside the business. Russell Reynolds has a track record of bringing new talent into the insurance industry, but when is the reinsurance industry going to take up the mantle?