Europe CEOs Locked in a Salary Stagnation for a Decade

CEO Pay in Europe: A Stagnant Tale with a Growing Green Twist

Surprising Yet Not Too Shocking: Recent research from Vlerick Business School suggests that the total compensation of European CEOs hasn’t made a dramatic leap in the last decade—even though everyone’s been talking about the need for a pay overhaul.

What the Study Covered

Led by Professor Xavier Baeten (reward & sustainability guru) and senior researcher Marthe Van Hove, the analysis dug into the STOXX Europe 600—the stock index that pulls together the biggest companies from 17 European nations. The team looked at governance and pay trends to see if there’s been real change.

Key Takeaway: No Big Salary Jump

Median total CEO pay in 2023: €3.81 million
Median in 2014: €2.88 million
That’s a modest rise, but when factoring in company size, inflation, and performance, the growth isn’t statistically meaningful.

Bottom line: Europe is either holding the line on executive pay or simply “good at keeping the numbers steady.” This could be good for the brain‑drain debate—governments can’t be sure if lower pay will push talent abroad, but evidence shows that great CEOs still find their way to European firms.

Xavier Baeten on the Motivation Gap: “CEOs love the challenge, progress, and pride of working for a solid organization; that’s what keeps them here even with a ‘remuneration handicap’.”

Non‑Financial KPIs Are Now the New Stars

While the overall pay structure remains traditional—about 28–34 % base, 22–29 % short‑term incentives (STIs), and 44–50 % long‑term incentives (LTIs)—there’s a huge shift in how success is measured.

In 2014, 16 % of companies tied LTIs to non‑financial metrics (think emissions, employee engagement, customer satisfaction, diversity). Fast forward to 2023: that number jumps to 64 %!
STIs? Even more dramatic—up from 71 % to 90 % of companies now factoring in ESG or other non‑financial KPIs.

So, while the paycheck remains stubbornly similar, the value drivers are increasingly green and people‑centric.

Share Ownership: A Push for Longer-Term Alignment

European CEOs are now expected to hold shares worth over 250 % of their base salary, up from 200 % in 2014. The idea is that they’ll think like long‑term investors. Still, the study finds that financial rewards tied directly to performance haven’t kept pace with this rise.