7 Salary Trends for Executive Job Roles

Executive jobs are popular for their attractive salaries and benefits packages. Companies try to keep up with compensation trends because they might lose their top leaders to competitors if they don’t. Well-paid executives are also quite keen on improving the bottom line and meeting other brand goals.

If you are a business owner, it’s essential to keep up with changes in executive salaries. This way, you can compensate the people running your brand appropriately. This information is also crucial for execs and other employees who want to be in such a position soon.

Here are seven executive salary trends you should know.

 

1️⃣ Performance-Based Salaries

Performance-based pay is becoming more common for executive roles. Many employers reward their leaders with a salary increase when they meet company goals. They may assess performance every quarter or bi-annually to determine the raise to offer.

Embracing performance-based pay has several benefits for employers. It motivates executives to meet organizational objectives, which improves operations. Besides, it boosts engagement and workplace productivity.

Every executive wants to feel appreciated for their effort and not by just giving them a shutout during meetings or company events. They want their hard work to reflect on their paycheck, and performance-based pay helps employers do this.

Attracting top talent may be tricky if your company doesn’t offer competitive pay. But, it’s possible to hire great executives and retain them if you revise salaries based on work quality.

 

2️⃣ Salary Raises for Executive Retention

Executives are in high demand since they influence the growth and reputation of a company. Paying these experts a low base salary or one that doesn’t match the market rate can cause them to quit. If other firms offer better pay and other incentives, you may also quickly lose top talent.

Employers are currently raising base salaries to retain their best leaders. They keep track of market rates and adjust executive compensation as often as needed. Sometimes, they monitor their competitors to determine how much they pay their leaders and match the figures.

 

3️⃣ Increased Salary Transparency

Executives’ salaries weren’t public information sometime back. Many employers didn’t reveal this information when advertising jobs. Other employees also had no clue how much their managers made.

Unlike in the past, there is more transparency regarding how much execs make. Many firms now list the amount or provide a range in their ads to ensure they attract the best candidates. Additionally, they don’t prohibit their staff from sharing how much they earn with their coworkers.

Salary transparency in executive job roles fosters trust among company leaders. It motivates other employees in junior roles to work hard and achieve similar financial success.

Another benefit of the pay transparency trend is job satisfaction. If executives know how much other companies pay for similar roles, they can assess if you are fair. Once they determine that you are within the market standards, they will likely be happy with their job.

 

4️⃣ Using Alternatives to Address Dissatisfaction With Executive Salaries

Even if executive salaries are attractive, they don’t always meet the needs of candidates in such roles. Some leaders feel they deserve better pay, but sometimes employers may be unable to match the requested amount.

Instead of raising salaries, some employers are using other incentives to address this issue. For example, they may offer annual bonuses and pay club memberships for their managers. They might also provide luxury brand gift cards or pay for cars and housing.

Offering such employee incentives avoids high salary costs while keeping executives happy. Employers can also partner with top brands to get deals like holidays and gift cards at a discount.

 

5️⃣ Allowances for Remote Work

Many executives choose to work from home when their company and duties allow. While this increases convenience, they may bear some costs out of pocket. For example, they may need to pay for software to contact their clients virtually. They also need reliable internet and may spend more on phone bills.

Offering allowances for executives working remotely is becoming popular. Employers increase salaries to cover the expenses that workers will bear due to their duties. This doesn’t affect companies’ finances much since they also avoid some costs associated with on-site employees. These may include office space, equipment, meals, and air conditioning.

 

6️⃣ Compensation for Changes in the Cost of Living

The cost of living is rising due to inflation and a decline in the value of money. As a result, executives might be unable to afford the same lifestyle they did a few years ago.

Employers are adjusting executive salaries to match the shift in cost of living. They analyze changes in their locations to adjust wages accordingly. For example, since inflation in New York rose by 2.9% in January 2024, firms may increase executives’ salaries at the same rate.

Companies sometimes poach executives with attractive skills and experience. Offering a slightly higher salary isn’t always enough to convince top talent to leave their current workplace.

If an executive lives in a low-cost area, they might hesitate to work in a costly region. Due to this, employers must offer an extra amount to cushion the employee for the new cost of living.

 

7️⃣ Covering Additional Expenses Due to Company Relocation

Business owners often change company locations to cut costs and allow their employees to enjoy nicer offices. They also do this to be closer to their clients and other amenities needed for operation. When firms relocate, executives may also need to move to perform their duties well.

Covering new expenses arising from an office move is a common salary trend. Employers may offer their executives a pay rise to cover additional gas they will use to drive to work. On top of a pay rise, firms may also provide a better benefits package and cover temporary housing.

 

Monitor Executive Salary Trends Closely

Executive salary trends influence how companies hire and compensate their leaders. Keep up with such changes by reading industry news regularly and following recruiting firms on social media. Find out how other brands in your field pay their executives by reviewing job ads. It’s also vital to assess how different salary trends boost employee retention so you can take full advantage.

Browse this blog for other news on executive jobs.