Our GECN Group Research Report on Global Executive Pay Governance Trends

Key Takeaways

• Internationally active companies need to monitor cross-border and global trends to shape their pay strategy.
• Executive pay governance is moving in a similar direction across most markets, with greater scrutiny of outcomes, disclosure, investor engagement, risk alignment, and board judgement.
• Our GECN Group report shows how Australia compares to major markets and discusses near-term developments.

The pay governance landscape is shifting in a similar direction, but mechanisms and adoption differ by jurisdiction

Disclosure expectations have shifted from volume to usefulness

• Disclosure is generally moving toward higher-quality, more investor-friendly reporting. The US is considering ways to reduce disclosure burdens while the UK is moving away from prescriptive, formulaic disclosure.

Pay practices have become more aligned due to benchmarking pressure but are also moving toward greater flexibility

• Proxy advisers and investors are slowly becoming more acceptive of international peer benchmarking, so long as it can be justified. Markets such as Australia, the UK, and the US are moving toward greater customisation as engagement with institutional investors becomes more sophisticated.

Risk management has become a more explicit part of pay governance

• Clawback provisions and risk-control measures are becoming more standard in pay design across most markets. Unlike in the US and in some Australian companies, most markets adopt these measures voluntarily, which leaves enforcement largely to board discretion.

ESG has been the most visible engagement theme, though its trajectory now varies by market.

• ESG influence in executive compensation surged between 2020 and 2023 but has softened or even reversed since 2024/2025. This trend has been observed in Australia, Brazil, and the US.

Proxy voting is becoming more nuanced

• Proxy advisers still have material influence in most markets, though their direct influence on votes is facing challenges. Amid US government pressure on proxy advisers, shareholders are becoming more active in stewardship, relying more on direct engagement with issuers and less on proxy adviser recommendations.

Internal pay equity has gained visibility, but its practical impact remains limited outside markets with formal disclosure requirements.

• CEO pay ratio and pay equity were once prominent topics that encouraged companies to consider the workforce as a stakeholder in CEO pay decisions. The UK is the major market that most clearly promotes internal alignment, and the US has adopted mandatory disclosure. However, these measures have not fundamentally affected CEO pay levels or incentive design.

Looking ahead

Market movement points to three near-term developments in pay governance:

1. Less standardised proxy adviser influence, but more market-specific scrutiny.

Proxy adviser influence will become less standardised and, in some jurisdictions, less intensive as large investors develop internal analytics, pass-through voting expands, and proxy advisers move toward more client-specific voting frameworks.

2. More focus on realised and realisable pay.

Investors will increasingly focus on what executives actually earn, or can realistically earn, rather than grant-date value alone. Realisable pay will become more common in disclosure to assist shareholders with evaluating the alignment of realised pay and actual performance, as an indicator of effective pay design.

3. More AI-enabled stewardship.

Stewardship teams will use more analytics and AI to identify compensation outliers, governance concerns, director independence issues, and related-party risks earlier in the proxy season. This will increase the value of pre-emptive shareholder engagement, which will play a crucial role in pay design, governance processes, disclosure, and voting outcomes. Better data and AI-enabled analysis will help investors identify issues earlier, but boards will still need to provide credible explanations for why pay design fits the company’s strategy, risk profile, and performance context.

For full detail, read our GECN Group report.