Exploring the Latest Trends in Executive Compensation

Executive compensation has been evolving quickly to reflect changing business priorities, stakeholder expectations, and talent dynamics. The package package breakdown will vary by industry (e.g., tech vs. manufacturing vs. PE-backed companies. Tech = growth and innovation incentives, Manufacturing = steady performance and capital discipline, PE-backed = aggressive value creation and exit-focused outcomes. Here are the top 3 trends in executive compensation in 2025:

1. Performance-Based Pay is More Granular and Strategic

• What’s new: There's a shift from just hitting EPS or revenue targets to multi-dimensional performance metrics, including:

  • ESG (Environmental, Social, Governance) goals

  • DEI targets

  • Customer satisfaction (NPS)

  • Long-term innovation or digital transformation milestones

• Why it matters: Boards want alignment between pay and broader stakeholder value, not just shareholder returns.

2. Equity is Still King—but with More Flexibility

• What’s new: Companies are getting creative with customized equity vehicles like:

  • Restricted Stock Units (RSUs) tied to specific milestones

  • Performance Shares with extended vesting horizons

  • Stock options that kick in after market cap or strategic triggers

• Why it matters: In a competitive talent market, especially for top roles in tech and growth companies, flexible equity helps attract and retain high-caliber leaders.

3. Transparency and Shareholder Scrutiny Are High

• What’s new: Say-on-pay votes, proxy disclosures, and even real-time pay vs. performance dashboards are becoming more common.

• Why it matters: Investors, employees, and the public are demanding transparency and fairness—especially in industries where wage gaps are under the microscope