Western firms need to review remuneration policies to remain competitive in the global war for executive talent, according to Piia Pilv, partner at consultancy Mercer’s executive remuneration team.

Research from Mercer reveals tighter purse strings in terms of executive pay in Western Europe and North America, combined with economic growth in emerging markets, is pushing pay up for executives in Asia beyond levels in the West.

In fact, executive pay in Asia has already exceeded European levels and is set to pass US pay levels within three years.

Pilv says: “Historically, executives in Western economies have been paid the most but the centre of gravity is moving inexorably East. In 2010, average executive salaries in Asia surpassed those in Europe and we anticipate that they will surpass those in the US by 2013.

“The trend is spread across many emerging economies; in the Middle East, for example, executive salaries have already caught up with those in Europe. Pay in Western economies is being restrained by poor economic growth and continued pay scrutiny in the wake of the financial crisis. Asia has been largely unaffected by these issues, so hasn’t had the brakes applied to executive remuneration as much.

“We should remember that Asia is an attractive place to work for many executives and better pay is only one factor in attracting many Western executives to the region.”