Compensation Trends at the Executive Level
What’s happening in compensation trends at the executive level in North America, Canada, and Internationally? Let’s take a look at some interesting hot takes.
Executive Compensation Trends Big Picture
Salary budgets are normalizing
Most employers plan ~3.5–3.9% base-pay increases for 2025, slightly down from 2024 actuals, with projections steady into 2026. U.S. and Canada sit near the middle of that band. Source: WTW Insights
Executive pay scrutiny is rising, but so are pay levels at the top
Board-level and CEO compensation continues to climb in key markets, with U.S. non-employee director medians and FTSE 100 CEO packages trending up on “global competitiveness” arguments. Expect continued investor debate on pay-for-performance. Source: Equilar Director Pay Trends
Retained search pricing remains consistent
Most retained executive searches are priced at 25–35% of first-year cash comp, typically staged across project milestones. Source: Investopedia – Executive Recruiters
Pay transparency is now a strategy, not just compliance
Multinationals are aligning job architecture, ranges, and communications to build trust and reduce friction in offers. Source:
SHRM – Pay Transparency Progress
North America Compensation Trends: What’s Moving
Boards and senior talent
U.S. boards emphasize seasoned operators and risk stewards; age and prior CEO/CFO experience are ticking up. Director compensation continues to edge higher, reinforcing demand and pricing pressure for proven leaders. Source: Reuters+1
Private equity ecosystem
PE investment pros reported robust 2024 pay and carry dynamics, a reminder that portfolio leadership hires frequently compete with PE comp structures. Offer competitiveness often hinges on equity design and value-creation milestones, not just base/bonus. Source: McKinsey Global Private Markets Report 2025
Canadian Compensation Trends
2025 Base Salary Increase Projections: ~3.6 %
Eckler’s Compensation Planning Survey (Canada) finds that for 2025, the national average base salary increase (excluding salary freezes) is projected at 3.6 %. Source: Eckler
This is slightly lower than 2024 projected increases, but still firmly above many developed markets’ targets—and a reminder that Canada’s competitive landscape remains tight for executive and leadership talent.
2024 Actual Increase: ~3.9 % (Canada average)
AJG’s Canada report notes that in 2024, average salary-increase budgets in Canada landed at 3.9 %, and 2025 forecasts lean toward 3.5 %. Source: Gallagher
When you compare U.S. averages (3.5 % to 3.9 %) with Canadian ones, it suggests Canadian firms are sustaining slightly elevated budgets, likely to hold ground in attracting and retaining senior talent across borders.
Executive Pay Structures: LTI & Incentive Growth
Mercer’s analysis of Canada’s TSX60 companies shows rising prevalence of performance share units (PSUs) and growing emphasis on long-term incentive components, especially in CEO packages. Source: Mercer
Linked to that, Southlea’s compensation disclosure data reveals that for Canadian mid-market executives, the long-term incentive piece is widening, with only ~36 % of total direct compensation accounted for by base salary in some cases—the rest is incentive pay. Source: CGP
This tells you that for executive search in Canada, base pay is becoming less of the differentiator; LTI design, consistency in payout, and alignment to outcomes are taking the lead.
Board / Director Compensation Growth: 7 % Year-on-Year
In the S&P/TSX 60, director compensation (inclusive of cash, committee fees, and equity), grew ~7 % in 2023 over 2022. Source: Meridian Compensation Partners
Moreover, the median total compensation for board members on a “model director” (HR + audit committee roles) has tracked up 3.8 % per year over 2019–2023. Source: Meridian Compensation Partners
For CHROs and CEOs, this signals that expectations around board and committee rewards are shifting fast—and these shifts bleed into how you structure C-suite and senior executive packages.
A Notable Canadian Case: Scotiabank CEO Pay Surge
To bring it to life, a recent high-profile Canadian example: Scotiabank raised CEO Scott Thomson’s pay by ~27 % in 2024, bringing his total target to ~C$9.76M, with a further C$11.5M target for 2025. Source: Reuters
Meanwhile, RBC’s CEO saw a jump of 61 % in his 2024 compensation to C$24.5M, tied to major strategic deals. Source: Reuters
These moves show that in Canadian banking and financial sectors, compensation at the top is still volatile, and boards justify high increases when tied to M&A or transformational strategic moves.
Compensation Trends: Global Perspective
Flattening, not falling
Across Europe and many developed markets, 2025 pay budgets hover ~3.2–3.6% and look stable into 2026. Inflation easing plus productivity pressures are keeping raises moderate. Source: WTW
UK/Europe at the top end
Several FTSE 100 companies are moving to boost CEO packages, citing U.S. competition and policy shifts, including the end of the EU bonus cap for UK banks. Expect sharper focus on LTI/restricted stock and performance alignment. Source: Financial Times
Equity and disclosure
Global issuers anticipate evolving disclosure norms and shareholder expectations on executive pay outcomes, tying packages more tightly to transparent metrics. Source: Equity Methods
Pricing the Search: Current Benchmarks
Fee model
Retained search: 25–35% of first-year cash comp, typically base plus target bonus, paid in thirds (engagement, shortlist, completion). Some firms add admin/expenses that can push effective cost toward the high-30s. Source: Investopedia – Executive Recruiters
Time-to-accept
With salary budgets moderating, candidates emphasize equity clarity, impact scope, and board access over marginal base increases. Strong role narratives are shortening decision cycles even when base growth is modest. Source: Gartner HR Research
What This Means for Your Next C-Suite Hire
Lead with value creation, then cash
With salary budgets flat, differentiate offers through clear mandates, measurable outcomes, and line-of-sight equity. Candidates will trade a 50–75 bps base delta for clarity on impact, upside, and support. Source: McKinsey – Private Markets Report 2025
Right-size equity, simplify the story.
Equity terms win or lose candidates. Use fewer instruments, crisp vesting tied to value-creation gates, and a one-page “how you win here” explainer. This counters moderate base growth and improves acceptance velocity. Source: Financial Times
Use transparency as a competitive edge
Publish range, bonus mechanics, and equity math early. In cross-border searches, align job architecture and ranges to local norms to avoid late-stage friction. Source: SHRM – Compensation Trends to Watch 2025
Key Takeaways
Canada is quietly rewriting its own compensation story. Salary budgets remain firm at 3.6 – 3.9 percent, but what’s moving the real market isn’t cash, it’s structure. The centre of gravity has shifted toward long-term value creation, not short-term appeasement.
In boardrooms from Toronto to Calgary, base pay now accounts for barely a third of total executive compensation, with the balance tied to incentives and performance equity. The message is clear: retention and attraction at the top are now built on alignment and accountability, not fixed pay.
For CEOs and CHROs, this has two implications. First, compensation design is strategy: it communicates your priorities more loudly than any press release. Second, clarity now outperforms generosity. Candidates want to see the link between effort, impact, and reward. They want to see leadership.
Across North America, the leaders who win talent are those who make the value proposition legible:
- Transparent ranges that build trust.
- Purpose-linked incentives that connect to measurable outcomes.
- Simplified equity stories that show how leadership success converts to shareholder value.
In this new landscape, salary growth may be flat, but sophistication is rising. Canadian firms that master compensation as a signal of culture, strategy, and credibility will out-recruit their peers, even against global competition.
Retention isn’t about paying more. It’s about paying with meaning and clear leadership.
