DATE PUBLISHED: JANUARY 24, 2025
The wide pay gap between U.S. and its European counterparts has existed for years; however, the difference has become much more visible as U.S. CEO pay increased significantly and U.K. companies became more forthright with their struggle to retain and recruit talent against the competitiveness of U.S. compensation. London Stock Exchange CEO Julia Hoggett has chimed in, highlighting the need to have a “constructive discussion on the U.K.’s approach to executive compensation.” This issue has also prompted Schroders and the Investment Association to voice their concerns regarding the ability of U.K. firms to remain competitive against this continuing pay differential environment. STOXX Europe 600 and FTSE 100 companies are simplifying their LTIPs by allocating a greater percentage to restricted shares. Restricted shares have proven to be an effective retention tool by incentivizing executives to remain at a company longer due to usually longervesting requirements.
In this analysis, ISS-Corporate looks at the pay gap between U.K., Europe and U.S. CEOs, specifically the FTSE 100, STOXX Europe 600 and S&P 500 constituents, in the period between FY2022 and FY2023.
