A comprehensive benchmarking study of executive compensation across 780 companies, 14 sectors, and 22 countries — analysing pay structures, performance linkage, and emerging trends shaping C-suite remuneration.
This benchmarking study analyses the compensation structures of 780 publicly listed companies across 14 sectors and 22 countries, covering the fiscal year ending in 2024. The study represents the fifth annual edition of K3i's executive compensation benchmark, enabling longitudinal trend analysis over a five-year period (2020-2024).
The sample comprises 780 companies selected to ensure statistical robustness across three dimensions: sector representation (14 sectors, with a minimum of 35 companies per sector), geographic coverage (22 countries across North America, Europe, and Asia-Pacific), and size distribution (mega-cap, large-cap, and mid-cap companies, classified by market capitalisation). All companies are publicly listed, ensuring access to audited compensation disclosures. Financial services companies are included but analysed with sector-specific adjustments to account for regulatory constraints on compensation structure.
Compensation data was collected from three primary sources: mandatory proxy filings and annual reports (the authoritative source for disclosed compensation), proprietary survey data from 340 participating companies (providing additional detail on unreported elements including internal equity benchmarking, peer group selection methodology, and compensation committee decision rationale), and commercial compensation databases for validation and gap-filling. All data was normalised to US dollars using average annual exchange rates and adjusted for purchasing power parity (PPP) in regional comparisons.
Total compensation is defined as the sum of five components: base salary, annual incentive (cash bonus), long-term incentive (grant-date fair value of equity awards), pension and deferred compensation (annual accrual or contribution), and other benefits (perquisites, insurance, allowances). We report both "Total Direct Compensation" (TDC = base + annual incentive + LTI) and "Total Compensation" (TDC + pension + benefits). Unless otherwise specified, figures in this report refer to Total Direct Compensation, which is the most commonly used benchmark metric.
The 2024 compensation landscape reveals several significant developments relative to prior years.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Median CEO TDC — Large Cap | $11.2M | $12.8M | $12.5M | $13.3M | $14.2M |
| Performance-Linked Pay (% of TDC) | 56% | 58% | 60% | 61% | 62% |
| LTI as % of TDC | 48% | 51% | 52% | 53% | 54% |
| Median Base Salary — Large Cap CEO | $1.25M | $1.28M | $1.30M | $1.32M | $1.35M |
| Companies with ESG-Linked Comp | 22% | 34% | 48% | 58% | 64% |
| Median CEO-to-Employee Pay Ratio | 256:1 | 282:1 | 268:1 | 274:1 | 281:1 |
The era of purely time-based executive compensation is ending. Boards and shareholders are demanding that a growing majority of CEO pay be tied to measurable performance outcomes — financial, operational, and increasingly environmental and social.
Understanding the composition of CEO compensation is essential for benchmarking, governance, and strategic compensation design. The four primary components serve distinct purposes in the compensation architecture.
Base salary is the fixed component of CEO compensation, providing income certainty and serving as the reference point from which other compensation elements are typically calculated (annual bonus targets are expressed as a percentage of salary, for example). Across our sample, median CEO base salary for large-cap companies was $1.35 million in 2024, representing approximately 10% of total direct compensation — a proportion that has declined steadily as variable pay has grown. Base salary increases have averaged 2.5-3.5% annually over the past five years, generally tracking inflation and reflecting the consensus that base salary growth should be modest and that incremental compensation should be delivered through performance-linked vehicles.
The annual incentive is a cash payment linked to the achievement of one-year financial and operational performance metrics. The median annual incentive for large-cap CEOs was $3.2 million in 2024, representing approximately 22% of TDC. Target bonus levels (expressed as a percentage of base salary) have remained relatively stable at 150-200% for large-cap CEOs and 100-150% for mid-cap CEOs.
The most common performance metrics for annual incentives are revenue growth (used by 82% of companies), operating income or EBITDA (78%), earnings per share (64%), return on capital or assets (45%), and cash flow metrics (42%). Non-financial metrics — including customer satisfaction, employee engagement, safety, and ESG indicators — are incorporated by 48% of companies, up from 28% in 2020, though they typically represent only 10-20% of total annual incentive weighting.
Long-term incentives (LTI) are equity-based awards that vest over multi-year periods (typically three to five years), aligning CEO interests with long-term shareholder value creation. LTI represents the largest component of CEO compensation, with a median grant-date fair value of $7.8 million for large-cap CEOs in 2024, representing approximately 54% of TDC. The dominance of LTI in the pay mix reflects the widely shared governance principle that the majority of CEO compensation should be tied to long-term value creation rather than short-term results.
Pension and other benefits — including supplemental executive retirement plans (SERPs), deferred compensation, health and life insurance, and perquisites — add an estimated 8-15% to total direct compensation, though disclosure practices vary significantly by jurisdiction. The long-term trend is toward reduced pension provision (defined benefit plans for new CEO appointments have become rare) and greater transparency in benefits disclosure, driven by regulatory requirements and shareholder pressure.
Compensation levels and structures vary significantly across sectors, reflecting differences in industry economics, talent market dynamics, regulatory environments, and shareholder expectations.
| Sector | Median CEO TDC | Base Salary % | Annual Bonus % | LTI % | YoY Change |
|---|---|---|---|---|---|
| Technology | $19.4M | 7% | 18% | 68% | +11.2% |
| Financial Services | $16.8M | 9% | 28% | 52% | +5.4% |
| Healthcare | $15.6M | 8% | 21% | 62% | +8.3% |
| Consumer Discretionary | $14.1M | 10% | 24% | 56% | +4.8% |
| Industrials | $12.8M | 11% | 25% | 54% | +3.6% |
| Energy | $14.5M | 9% | 26% | 55% | +6.2% |
| Consumer Staples | $11.9M | 12% | 23% | 55% | +2.8% |
| Materials | $10.6M | 13% | 24% | 52% | +3.1% |
| Utilities | $9.8M | 14% | 22% | 50% | +2.4% |
| Real Estate | $9.2M | 15% | 27% | 46% | +1.9% |
The technology sector commands the highest median CEO compensation at $19.4 million — 37% above the all-sector median. Technology compensation is distinguished by the dominant weight of long-term incentives (68% of TDC versus 54% for all sectors), reflecting both the sector's equity culture and the intense competition for executive talent. The 11.2% year-on-year increase was the largest across sectors, driven by strong equity market performance and the acute talent competition in AI, cloud computing, and cybersecurity. Within technology, compensation varies dramatically by sub-sector: enterprise software CEOs earned a median of $22.8 million, while semiconductor CEOs earned $17.2 million and IT services CEOs earned $13.5 million.
Financial services CEO compensation ($16.8 million median) reflects both the scale and profitability of the industry and the regulatory constraints that shape compensation structure. Post-financial-crisis regulations in Europe (CRD V) and to a lesser extent the US mandate bonus caps, deferral requirements, and clawback provisions that are more restrictive than in other sectors. The annual bonus component is higher than in most sectors (28% of TDC versus 22% all-sector average), reflecting the industry's historically strong cash bonus culture — though the trend is toward greater equity weighting. Within financial services, investment banking and private equity CEOs earn significantly above the sector median, while retail banking and insurance CEOs fall below.
Healthcare CEO compensation ($15.6 million median, +8.3% year on year) reflects the sector's strong financial performance and the premium placed on leadership in an industry undergoing significant transformation. Pharmaceutical and biotech CEOs earn at the high end of the sector ($18-22 million median for large pharma), while health system and payer CEOs earn at the lower end ($10-14 million), reflecting differences in organisational scale, equity culture, and the not-for-profit governance structures prevalent among hospital systems.
Company size — measured by market capitalisation, revenue, and employee count — is the single strongest predictor of CEO compensation levels, explaining approximately 45% of the variance in total direct compensation across our sample.
| Size Category | Market Cap Range | Median CEO TDC | 25th Percentile | 75th Percentile |
|---|---|---|---|---|
| Mega-Cap | >$100B | $28.6M | $21.2M | $38.4M |
| Large-Cap | $10B-$100B | $14.2M | $10.1M | $19.8M |
| Mid-Cap | $2B-$10B | $5.8M | $4.0M | $8.2M |
The relationship between company size and CEO compensation is non-linear: doubling market capitalisation is associated with approximately a 35-40% increase in median CEO TDC. This elasticity has increased over time — the gap between mega-cap and mid-cap CEO compensation has widened from 3.8 times in 2020 to 4.9 times in 2024, reflecting the growing premium for leading the most complex global organisations and the role of equity market performance in driving mega-cap compensation levels.
Mega-cap companies ($100 billion+ market capitalisation) present unique compensation dynamics. CEOs of these organisations lead enterprises of extraordinary complexity — operating across dozens of countries, managing hundreds of thousands of employees, and making decisions that affect global markets. The compensation premium for mega-cap leadership reflects this complexity, but it also reflects the outsized role of equity awards: when stock prices appreciate significantly, CEO compensation at equity-heavy mega-cap companies can increase by multiples that bear little relation to changes in operational performance. This dynamic drives much of the public and political scrutiny of executive compensation.
Executive compensation levels and structures differ dramatically across geographies, reflecting differences in corporate governance traditions, regulatory frameworks, tax systems, and cultural attitudes toward pay inequality.
US CEO compensation remains the highest in the world, with median large-cap CEO TDC of $16.8 million — approximately 1.7 times the European median and 2.1 times the Asia-Pacific median. The US compensation model is characterised by a dominant LTI component (58% of TDC), reflecting the deep equity culture, favourable tax treatment of long-term capital gains, and the expectation that CEO wealth creation should be primarily tied to stock price performance. The US is also distinguished by the highest degree of pay dispersion: the gap between the 25th and 75th percentile of CEO compensation is wider in the US than in any other market, reflecting the influence of individual negotiation, one-off retention grants, and the competitive dynamics of the executive talent market.
European CEO compensation (median large-cap TDC of $9.8 million) operates under more prescriptive regulatory and governance frameworks than the US. The EU Shareholder Rights Directive II mandates binding shareholder votes on remuneration policy, and several European jurisdictions impose specific constraints: bonus caps in financial services (CRD V), mandatory holding periods for equity awards, and increasingly detailed disclosure requirements. The European compensation structure places a higher weight on base salary (16% versus 10% in the US) and a lower weight on LTI (44% versus 58%), reflecting both regulatory constraints and cultural preferences for lower pay variability. Within Europe, UK and Swiss compensation levels approach US levels for equivalent company sizes, while continental European markets (Germany, France, the Nordics) are materially lower.
Asia-Pacific CEO compensation (median large-cap TDC of $8.1 million) is the most heterogeneous across the three regions. Japan and South Korea have traditionally paid CEOs well below Western levels — reflecting cultural norms, concentrated ownership structures, and the expectation that executives are stewards rather than star performers. However, both markets are experiencing rapid compensation growth as governance reforms (Japan's Corporate Governance Code, Korea's value-up programme) encourage greater alignment with international best practice. Australia, Singapore, and Hong Kong pay at levels closer to European norms, while Greater China presents a wide distribution reflecting the coexistence of state-owned enterprises (modest compensation) and private-sector technology companies (compensation approaching US levels).
Regional compensation differences are narrowing — but slowly. Global talent markets, cross-border board appointments, and international proxy advisory standards are creating convergence pressure, while local regulatory frameworks, tax systems, and cultural norms maintain meaningful differentiation.
The credibility of executive compensation rests on its alignment with performance: are the highest-paid CEOs delivering the best results for shareholders and stakeholders? Our analysis examines this relationship using multiple performance metrics.
We classified companies into TSR quartiles based on three-year total shareholder return (2021-2024) and examined the relationship between TSR performance and CEO realised compensation (the actual value received, as opposed to the grant-date value reported in proxy statements). The findings demonstrate meaningful but imperfect alignment:
The 3.4 times ratio between top and bottom quartiles indicates meaningful differentiation, but the relationship is far from deterministic. Approximately 18% of bottom-quartile TSR companies paid their CEOs above the all-sample median — suggesting that in nearly one-fifth of underperforming companies, compensation governance did not adequately reflect performance outcomes.
TSR is influenced by market sentiment and macroeconomic factors beyond management control. When we examined the relationship between CEO compensation and operational metrics (revenue growth, EBITDA margin expansion, return on invested capital), the correlation was weaker — a finding that raises questions about whether compensation structures are appropriately calibrated to reward the operational value creation that management can directly influence. Companies using a balanced scorecard of financial and operational metrics in their annual incentive plans showed a stronger correlation between compensation and operational performance than those using primarily financial metrics, suggesting that metric design is a critical governance lever.
Long-term incentive design is the most dynamic and consequential area of executive compensation, directly influencing CEO behaviour, risk-taking, and strategic orientation. Our analysis reveals significant shifts in LTI design practices over the five-year study period.
| LTI Instrument | Prevalence 2020 | Prevalence 2024 | Typical Weight in LTI Mix |
|---|---|---|---|
| Performance Share Units (PSUs) | 68% | 82% | 50-60% |
| Restricted Stock Units (RSUs) | 72% | 78% | 30-40% |
| Stock Options | 42% | 28% | 15-25% |
| Performance Cash | 18% | 22% | 10-20% |
| ESG-Linked LTI | 8% | 34% | 10-20% |
The most pronounced trend in LTI design is the continued migration from stock options to performance share units. Options — which reward stock price appreciation without downside risk to the holder — have declined in prevalence from 42% to 28% of companies over five years. PSUs — which vest based on the achievement of predetermined performance conditions (typically TSR, EPS, or revenue targets) measured over three-year periods — have risen from 68% to 82%. This shift reflects the governance consensus that PSUs provide more targeted incentives (rewarding specific performance outcomes rather than general market appreciation), better downside exposure (options are underwater but not negative; PSUs can vest at zero), and greater alignment with strategic objectives.
The integration of ESG metrics into long-term incentive plans has accelerated rapidly, rising from 8% of companies in 2020 to 34% in 2024. However, the design quality of ESG-linked LTI varies enormously. The most credible implementations use quantified, externally verifiable targets (absolute carbon reduction, employee engagement scores, safety incident rates) with meaningful weighting (15-20% of total LTI). The least credible use vague qualitative assessments with negligible weighting — appearing to satisfy governance expectations without creating genuine incentive effects. Our analysis found no statistically significant relationship between the presence of ESG-linked LTI and actual ESG performance improvement — unless the ESG component represented at least 15% of total LTI value and was tied to specific, measurable targets. Below this threshold, ESG-linked LTI appears decorative rather than functional.
Vesting periods for LTI have lengthened modestly: the median performance period for PSUs increased from three years to three years in our sample (unchanged at the median), but the proportion of companies requiring post-vesting holding periods (requiring executives to hold vested shares for an additional one to two years) increased from 28% to 41%. This trend reflects the growing recognition that three-year performance periods, while standard, are insufficient to align CEO incentives with truly long-term value creation. Several leading governance practitioners advocate for five-year performance periods or "career shares" that vest only upon retirement, though adoption of these more aggressive designs remains limited.
The CEO-to-median-employee pay ratio has become one of the most scrutinised and politically charged metrics in executive compensation, required for disclosure by US-listed companies since 2018 and by an increasing number of jurisdictions globally.
The median CEO-to-employee pay ratio across our US sample was 281:1 in 2024, up from 256:1 in 2020. The ratio varies dramatically by sector: technology (412:1), consumer discretionary (368:1), and healthcare (305:1) exhibit the highest ratios, reflecting both high CEO compensation and large workforces in lower-wage operational roles. Utilities (142:1), financial services (198:1), and industrials (216:1) exhibit lower ratios, reflecting compressed CEO compensation (utilities) or higher median employee pay (financial services).
The pay ratio is a blunt instrument for assessing compensation fairness or governance quality. It is heavily influenced by workforce composition (companies with large numbers of part-time, seasonal, or non-US employees report higher ratios regardless of compensation governance), industry economics (capital-intensive industries with smaller, higher-paid workforces produce lower ratios than labour-intensive industries), and corporate structure (conglomerates with diverse business units produce higher ratios than focused companies). Nevertheless, the metric has significant political and reputational salience, and several institutional investors and proxy advisors now consider the pay ratio in their voting recommendations on compensation matters.
Beyond the CEO-to-employee ratio, broader pay equity analysis — examining compensation fairness across gender, ethnicity, and role — is becoming a governance expectation. In our sample, 52% of companies now publish some form of pay equity analysis (up from 18% in 2020), though the scope, methodology, and transparency of these disclosures vary significantly. Companies that conduct and publish comprehensive pay equity analyses — and, critically, that act on the findings to close identified gaps — report higher employee engagement, stronger employer brand metrics, and fewer employment discrimination claims.
The quality of board governance over executive compensation has improved measurably over the five-year study period, driven by regulatory pressure, institutional investor engagement, and the professionalisation of the compensation committee function.
Across our sample, 96% of companies have a fully independent compensation committee (up from 88% in 2020). More significantly, the expertise of committee members has deepened: 72% of committees now include at least one member with direct experience in executive compensation design (as a former CHRO, compensation consultant, or governance professional), compared with 48% in 2020. Committee chair tenure averages 4.2 years, reflecting a balance between continuity and fresh perspective.
Say-on-pay votes — shareholder advisory (or in some jurisdictions, binding) votes on executive compensation — achieved an average approval rate of 89% across our sample in 2024. However, 8% of companies received less than 70% support (typically triggering mandatory engagement with dissenting shareholders), and 2% received majority opposition — an increase from prior years that reflects growing shareholder assertiveness on compensation matters. Companies that experienced low say-on-pay support overwhelmingly shared common characteristics: outsized one-off awards, weak pay-performance alignment, inadequate disclosure of compensation rationale, and failure to respond to prior shareholder feedback.
Clawback provisions — allowing companies to recover compensation in the event of financial restatements, misconduct, or other defined trigger events — have become near-universal following the SEC's adoption of mandatory clawback rules under the Dodd-Frank Act. In our sample, 98% of US companies and 84% of non-US companies now have formal clawback policies. The scope of clawback provisions has expanded beyond financial restatements to include misconduct, reputational harm, and risk management failures — reflecting the post-crisis consensus that executive accountability must have financial consequences.
Several emerging developments will reshape executive compensation practices over the next three to five years.
The integration of ESG metrics into executive compensation is the most significant design trend of the past five years, rising from 22% of companies in 2020 to 64% in 2024. The challenge is moving from symbolic inclusion (vague metrics, negligible weighting) to genuine influence on behaviour and outcomes. Our analysis identified best practices for effective ESG-linked compensation: select 3-5 quantified, externally verifiable ESG metrics aligned with the company's material ESG issues; weight them at 15-20% of annual incentive and 10-15% of LTI; set targets that are stretching but achievable; and subject outcomes to independent verification. Companies that followed these principles demonstrated measurably better ESG performance improvement than those with weaker designs.
Pay transparency legislation is expanding globally. The EU Pay Transparency Directive (effective 2026) will require companies to disclose pay ranges in job postings, provide employees with the right to request pay data for comparable roles, and report gender pay gap information. Similar legislation has been enacted or proposed in multiple US states, the UK, Australia, and Canada. For executive compensation, increased transparency will intensify scrutiny of internal pay equity, compression between executive and senior management compensation, and the rationale for individual pay decisions. Compensation committees must prepare for an environment where compensation data is more widely available and more actively scrutinised by employees, media, and the public.
Advanced analytics and AI are beginning to transform compensation governance itself. Leading compensation committees and their advisors are using AI-powered tools for peer group analysis (identifying the most relevant comparator companies based on multidimensional similarity rather than simplistic industry-and-size matching), pay-performance simulation (modelling the compensation outcomes under various performance scenarios before finalising plan design), and market intelligence (real-time monitoring of compensation trends and competitive dynamics). These tools have the potential to improve the quality of compensation decisions while reducing the time required for analysis — allowing committees to focus more of their limited meeting time on judgment and strategy rather than data processing.
The stakeholder capitalism movement — which holds that corporations should serve the interests of all stakeholders, not just shareholders — is influencing compensation design. Proponents argue that executive incentive metrics should encompass customer satisfaction, employee wellbeing, community impact, and environmental stewardship alongside financial performance. Opponents argue that broadening incentive metrics dilutes accountability and makes performance evaluation subjective. In practice, most companies are navigating a middle path: maintaining financial metrics as the primary drivers of compensation while incorporating selected non-financial metrics that are material to the company's long-term value creation and stakeholder relationships.
Based on our analysis of 780 companies' compensation practices and their outcomes, we offer the following recommendations for compensation committees seeking to design effective, defensible, and value-creating executive compensation programmes.
The following supplementary data provides additional granularity on compensation structures by sub-sector and region.
| Role | Median TDC (Large Cap) | As % of CEO TDC |
|---|---|---|
| Chief Executive Officer | $14.2M | 100% |
| Chief Financial Officer | $6.4M | 45% |
| Chief Operating Officer | $7.1M | 50% |
| Chief Technology Officer | $5.8M | 41% |
| Chief Human Resources Officer | $4.6M | 32% |
| General Counsel | $4.9M | 35% |
| Division/Business Unit President | $5.5M | 39% |
C-suite relativities have remained broadly stable over the five-year period, with the CFO consistently earning 43-47% of CEO TDC and the COO earning 48-52%. The most notable trend is the rising compensation of CTOs — increasing from 35% of CEO TDC in 2020 to 41% in 2024 — reflecting the strategic importance of technology leadership and the intense competition for technology executive talent. CHROs have also seen above-average compensation growth, reflecting the elevated strategic profile of talent management in a tight labour market.