Looking ahead to 2025, company leaders voiced “cautious optimism” about corporate performance and executive pay, indicating a steadier approach than in recent years, according to a Nov. 19 report from Pearl Meyer, an executive compensation and leadership consultancy.
About half said they expect moderate (36%) or significant (10.5%) improvements in their overall financial results, while 17% anticipate a modest decline.
“Unlike the previous few years, when anticipated base salary increases were far above the historical norm, this year our respondents are projecting rates that are best characterized as cautiously optimistic,” Bill Reilly, managing director at Pearl Meyer, said in a statement.
In a survey of board directors, executives and HR pros at 219 organizations, 82% expect to provide about the same or higher salary increases to their executives in 2025. In general, salary increase percentages are projected to be higher than the historical target of 3% but more moderate than in recent years.
For CEOs, the average expected increase is 3.3%, with the median at 3.5% and the 75th percentile at 4%. The percentages appear to be similar for CEO direct reports, and the average expected increase for the broader workforce is 3.5%.
Executive benefits decision-makers have said benefits remain key to retaining leaders, according to an NFP report. However, only 29% of executives fully understand their benefits, particularly complex offerings, the report found.
In mid-2024, nearly two-thirds of companies from the S&P Composite 1500 Index said they were incorporating environmental, social and governance goals into CEO performance metrics, according to a WTW report. At the same time, ESG may not be adopted more broadly due to pushback and legal concerns around diversity, equity and inclusion programs, the firm said.