European chief executives have seen their pay change very little in the past ten years, according to new research.

The news comes as UK companies continue to raise pay levels response to a campaign to hike pay to compete for talent internationally.

Research from Vlerick Business School in Ghent, looking at CEOs in 17 European countries, finds that after considering company size, inflation and performance, pay has “not significantly risen over the last decade”.

Median CEO pay in the STOXX Europe 600 in 2023 stood at €3.80m, up from €2.88m in 2014. But the regression analysis reveals the pay levels have barely shifted.

Xavier Baeten, a professor and expert in remuneration at Vlerick, says though European pay levels may be lower but this does not appear to be an impediment to recruiting talent.

“At this moment there is a debate whether lower top executive remuneration levels lead to a brain drain.

“However, we do see that European firms, notwithstanding the ‘remuneration handicap’, still manage to attract good CEOs.

“Our research by our centre has shown that CEOs are mainly motivated by challenge, making progress and the pride to work for their organisation.”

The news comes barely a month after Julia Hoggett, chief executive of the London Stock Exchange, declared victory in her campaign to convince the UK to accept higher rates of pay for CEOs.

In a speech for the annual gathering of the Capital Markets Industry Taskforce (CMIT), Hoggett said remuneration committee chairs were now “able to significantly increase pay packages for top talent.”

Hoggett has made the argument that higher levels are necessary so that UK-listed companies can compete internationally for talent and help boost UK growth.

Marroco bound

This week, high pay settlements continued, with the Financial Times reporting that cigarette maker BAT striking a new pay deal to potentially pay CEO Tadeu Marroco up to £18.2m.

Last year, London Stock Exchange Group doubled the pay of its CEO, David Schwimmer, Hoggett’s boss, to £13m.

Last week, research from shareholder advisors Georgeson revealed that investors had pay at the top of their engagement priorities. A new report said: “Investors seek to ensure that executive is fair, sustainable and aligned with long-term value creation.

“Companies will likely need to adopt a more nuanced approach to remuneration design and disclosure.”

Some things have changed in European pay deals. Vlerick says use of non-financial CEO performance measures—emissions, employee engagement, customer satisfaction and diversity metrics—has grown from 16% of companies in 2014 to 64% in 2023.

CEO pay will continue to be an issue in the UK as its business leaders look to the US as an example of good corporate practice and competitiveness. Europe’s companies show they are willing to go their own way.