French CEOs earn the most in Europe, though their pay is still far below the average compensation for U.S. executives, according to the Hay Group, a human resources firm.

French chief executives received the highest median total direct compensation--including salary, bonus, and fair value of long-term incentive awards--according to the survey of compensation at the 50 largest European companies, “How Chief Executives Are Paid,” released by Philadelphia-based Hay Group in January. Numbers were based on the most up-to-date financial reporting figures available from each company, the study noted.

Companies in France also provide the largest long-term incentive opportunities. The most popular long-term incentive plans in Europe were stock options and performance shares, with nine of the surveyed French companies granting the former and two the latter.

The report indicated that companies in the United Kingdom pay their chief executives higher base salaries on average. The total direct pay might have been lower because, all of the U.K. companies surveyed had performance-based share plans. Less than half of those firms have stock option plans, and less than a quarter have matching bonus plans, according to the Hay Group.

Median total cash for European CEOs was about €3.3 million with total direct annual pay (total cash plus the fair value at the award date of any long-term incentive bonuses) averaging about €5 million.

German companies paid the highest bonuses in Europe, with a median payment of 185 percent of salary. U.K. firms were in second with a median bonus payment of 160 percent of salary. By comparison, the median U.S. executive receives bonuses of 300 percent of his or her base pay, the survey noted.

Seventeen European companies reported using deferred bonuses to compensate their CEOs--by which the executives’ bonus payments are held for a period then paid, most commonly in the form of shares. Two companies in the survey--both German--use deferred cash bonus plans, but none of the other European firms do.

The Netherlands had the lowest rates of total CEO compensation. However, the CEO of a Dutch company, Jeroen van der Veer of Royal Dutch Shell, received the fourth-highest total direct compensation of any European chief executive, the report notes. Arun Sarin of U.K.-based Vodafone Group had the highest, followed by executives at GlaxoSmithKline and BP, also based in the U.K.

Dutch investor advocates have warned domestic companies against upward-spiraling CEO pay. In November, the Dutch institutional investor association, Eumedion, sent a letter to the 75 largest companies in the Netherlands urging them to use U.S. companies cautiously in their pay-benchmarking peer groups.

According to the survey, the median total direct CEO compensation at the largest 50 U.S. companies by market capitalization is around €13 million (about $19.4 million). The highest-paid American CEO in the survey (Ed Whitacre Jr. of AT&T) had a total direct compensation in 2006 of about €7.3 million above Sarin, the highest-paid European CEO.