UK chief executives at STOXX Europe 600-listed companies now sit at the top of the European pay table, with median total remuneration rising 68% since 2016 to €6.07m (about £5.19m at 2026-05-25 rates), according to the latest CEO Remuneration Report from Vlerick Business School. That figure leads Germany and France by a measurable margin, yet the Vlerick data raises a pointed question for UK remuneration committees: how much of that rise reflects genuine value creation, and how much reflects a single boardroom design choice about which peers get put in the comparison group?

What the Vlerick research found

The report, led by Professor Xavier Baeten and senior researcher Marthe Van Hove at Vlerick's Executive Remuneration Research Centre, covers the STOXX Europe 600 index: 600 listed companies across 17 European countries. The headline finding for the UK is stark. Median European CEO pay rose 12% last year to €4.65m (about £3.97m at 2026-05-25 rates). UK-listed companies recorded a median of €6.07m (about £5.19m at 2026-05-25 rates), ahead of Germany at €5.28m (about £4.51m at 2026-05-25 rates) and France at €5.19m (about £4.44m at 2026-05-25 rates). German chief executives lead on fixed pay, with a median base salary of €1.40m (about £1.20m at 2026-05-25 rates), which is 22% above the European benchmark.

Since 2016, median total CEO pay across Europe has risen 48% in nominal terms. That trajectory sits awkwardly alongside stagnant real wages for lower and middle earners over the same period, a dynamic that the Resolution Foundation has documented in successive UK wage reports. For UK-listed firms, the 68% nominal increase since 2016 is the fastest in the study and invites scrutiny from shareholders, the Chartered Institute of Personnel and Development (CIPD), and the Financial Reporting Council (FRC) alike.

Why US benchmarks push pay up

The most consequential finding in the Vlerick study is the role of peer-group selection. Among STOXX Europe 600 companies, 51% now benchmark CEO remuneration against at least one US competitor. At those companies, chief executives typically earn 80 times what their employees earn. At companies that benchmark within Europe only, the multiple is 47 times. That near-doubling of the internal pay ratio is driven primarily by larger long-term incentives, share-based awards vesting over three to five years, which have risen 41% since 2016 and are now the largest single component of CEO packages.

Marthe Van Hove described the dynamic in direct terms, arguing that Europe is importing a pay practice suited to a very different societal, economic and stock market context, rather than one that reflects the continent's own ownership structures and stakeholder expectations. The observation is particularly pointed for UK remuneration committees, which operate under FRC Corporate Governance Code Provision 41, requiring that pay policies align the interests of the executive with the long-term success of the company and consider pay and conditions across the wider workforce.

Bigger incentives, no better results

The performance case for larger packages does not hold up in the Vlerick data. Larger annual bonuses showed no statistically significant link to improved company performance. More strikingly, long-term incentive grants worth more than 200% of base pay were associated with lower three-year total shareholder returns. For UK remuneration committees, that finding intersects directly with FRC Corporate Governance Code Provision 40, which requires performance metrics and targets to be clearly explained in the remuneration report and linked to the company's strategy.

Part of the problem lies in how incentive plans are built. Professor Baeten identified a structural flaw that is common across the market: some plans use the same key performance indicator in both the annual bonus and the long-term incentive plan, meaning executives are rewarded twice for identical achievements. As he put it, boards should focus on how incentives are designed and look for KPIs that express strategic priorities, rather than copying market practice and assuming bigger rewards produce better results. Luke Hildyard, Director of the High Pay Centre, has made a compatible argument in the UK context, noting that executive pay packages are too frequently designed by reference to peer groups rather than by reference to what the business actually needs from its leadership.

Non-financial goals remain largely cosmetic. They appear in 72% of long-term incentive plans but carry only 18% of the overall weighting. Climate targets are the most common, used by 47% of companies, though their low weighting limits their practical force. Diversity targets have retreated: their share of long-term incentive plans fell from 14% to 8% between 2023 and 2025, a direction of travel that sits uneasily with public commitments made by many UK-listed boards on workforce inclusion.

On gender at the top: female CEOs accounted for 3.7% of the sample in 2016 and 9.6% in 2025. After controlling for other variables, the researchers found no statistically significant pay difference between male and female chief executives. For UK-listed companies subject to Equality Act 2010 gender pay gap reporting obligations, that finding offers a limited reassurance at the very top of the hierarchy; gender pay gaps across the broader workforce remain a separate and ongoing concern.

For employees: what an 80:1 ratio means in practice

An 80:1 pay ratio does not change what appears on your payslip. It does tell you something concrete about how your employer thinks about pay across the organisation. For every pound a typical employee earns, the chief executive earns roughly 80. That gap is not incidental; it reflects a deliberate choice about which comparators the board uses.

There is a practical asymmetry worth understanding. Most CEO packages are benchmarked against the highest-paying comparator markets available, often including US firms. Most employees' salaries are benchmarked locally, against national or sector data compiled by sources such as the Office for National Statistics (ONS) Annual Survey of Hours and Earnings (ASHE). If you believe your pay has fallen behind the market, the effective response is to bring the same rigour to your own benchmarking. Identify comparable roles in your sector and location, use salary data from verified sources, and enter any negotiation with specific figures rather than a general sense that the market has moved.

UK employees at listed companies with 250 or more UK staff have a legislative tool available under the Companies (Miscellaneous Reporting) Regulations 2018, which require those companies to publish their CEO pay ratio annually alongside supporting narrative. The ratio must compare CEO total remuneration to the median, 25th-percentile and 75th-percentile UK employee pay figures. Checking your company's directors' remuneration report, which is filed at Companies House, can give you a direct read on how your employer characterises the gap and what it says, on the record, about its approach to pay fairness.

The EU Pay Transparency Directive, which required transposition by EU member states by June 2026, does not apply to the United Kingdom following its departure from the EU in 2020. UK employees are not entitled to the same category of proactive pay disclosure that is now required across the EU. However, the gender pay gap reporting framework under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, along with the CEO pay ratio disclosures described above, means there is more on the public record about pay structures at large UK employers than is sometimes appreciated. ACAS (Advisory, Conciliation and Arbitration Service) publishes guidance on how to raise pay concerns constructively, including where a collective agreement or trade union is not in place.

For HR and remuneration committees: making CEO pay defensible

The Vlerick findings present remuneration committees at UK-listed companies with a specific governance challenge. Under FRC Corporate Governance Code Provision 41, remuneration policies must be designed to promote the long-term success of the company and be put to shareholders for approval at least every three years. Where a committee has included US firms in its CEO peer group, it now needs a documented rationale that can withstand shareholder scrutiny, particularly from institutional investors who have signalled increasing scepticism about US pay benchmarking by European boards.

The CIPD's annual UK Reward Management Survey tracks profit-sharing and incentive plan take-up across UK organisations and consistently shows that the design of incentive structures matters more than their size in driving engagement. That finding aligns with the Vlerick evidence on performance outcomes. Companies Act 2006 s.172 also sets a relevant frame: directors have a legal duty to act in the way they consider, in good faith, most likely to promote the success of the company for the benefit of its members as a whole. Where incentive design can be shown to produce no performance benefit, that duty becomes a live governance question rather than a theoretical one.

Practical steps for remuneration committees and HR directors to consider:

• Audit the peer group with documented rationale. For each US company included in the benchmarking exercise, record the specific business case. Then model what the CEO package would look like against a European-only peer group and present both scenarios to the committee.
• Check for KPI overlap between short-term and long-term plans. List every metric used in both the annual bonus and the long-term incentive plan. Where the same measure drives both, the committee should be able to articulate, in writing, why that is deliberate and proportionate.
• Apply additional scrutiny to grants above 200% of base pay. The Vlerick data links long-term incentive grants at or above that threshold to lower three-year shareholder returns. Any proposal at or above that level warrants a formal performance impact assessment before approval.
• Give non-financial targets real weight, or remove them. A target that carries 18% of the overall scorecard weighting is unlikely to drive behaviour. Committees should either increase the weighting to a level that is material, or consolidate targets so that those which remain carry credible influence over executive decisions.
• Prepare a clear narrative for staff, union representatives and shareholders on the pay ratio. Under the Companies (Miscellaneous Reporting) Regulations 2018, the directors' remuneration report must include supporting commentary on the ratio. That commentary is also visible to employees, Prospect union representatives in professional and technical grades, and the wider public via Companies House filings. A clear, proactive explanation is significantly easier to defend than a reactive one.

The question both sides should ask

The Vlerick data does not assert that UK or European chief executives are overpaid by a fixed amount. It demonstrates that a single structural choice, namely which comparator group a board selects, is closely associated with an internal pay gap almost twice as wide, and with no measurable improvement in performance outcomes. For employees using published CEO pay ratios to understand their employer's pay culture, and for remuneration committees preparing to defend their decisions under FRC governance requirements and Companies Act obligations, the underlying question is the same: compared with whom, and on what basis? The answer to that question shapes pay structures throughout the organisation, not just at the top.