CEO Pay Hits $18 Million as Sign-On Bonuses Reach Six-Year High

Median granted CEO pay at S&P 500 companies rose by more than 8% in 2025 to reach $18.2 million, while cash sign-on bonuses for incoming CEOs hit a six-year high, according to the Executive Compensation in 2026 report from Diligent Market Intelligence.

The findings point to a more consequential compensation environment for boards: leadership talent is in shorter supply, CEO transitions are costly, and investors continue to scrutinize how pay decisions connect to performance and long-term value.

The Russell 3000 also saw remuneration packages grow larger, with median granted CEO pay climbing over 2% to $7.4 million.

“This level of growth has been fueled by performance-based equity and stock awards while both indices have been delivering strong total shareholder returns,” said Josh Black, Editor-in-Chief of Diligent Market Intelligence. “Boards are also increasingly viewing CEOs as a scarce global talent pool.”

CEO Turnover Drives Higher Transition Costs

• Cash sign-on bonuses for new S&P 500 CEOs reached a six-year high in 2025, averaging $3.7 million, up from $3 million in 2024 and $2.4 million in 2023.

• Severance for departing CEOs also climbed, reaching an average of $6.8 million at S&P 500 companies in 2025.

• The rise in succession costs comes as CEO turnover has accelerated in recent years. Almost 40 S&P 500 CEOs had departed by the end of June 2026, with 67 executives transitioning during 2025, up 29% since 2023.

U.K. boards loosen pay structures as Europe closes the gap:

• As the U.K. competes to retain executives, median granted CEO pay in the FTSE 100 rose 16% to reach 6.1 million pounds.

• U.K. boards are loosening pay structures while retaining core safeguards. Long-term incentives accounted for over 54% of median granted CEO pay in the FTSE 100 in 2025, up from 52% in 2024.

• Median granted CEO pay rose by nearly 14% in France’s CAC 40 to 6.8 million euros, while Germany’s DAX recorded a more modest 2% increase, bringing median pay to the same level as its European counterpart.

Compensation Committees Face Heightened Investor Scrutiny

• If adopted, the SEC’s proposed overhaul of the compensation disclosure regime could remove the obligation to hold a “say on pay” vote from 80% of public companies. That could make the compensation committee a more prominent focal point for investors seeking to register dissatisfaction with executive pay.

• Average support for S&P 500 directors held steady at 96% in the opening half of 2026. However, compensation committee chairs received lower average support at just over 94%, while committee members secured nearly 96% approval.

• Average support for “say on pay” resolutions at the S&P 500 exceeded 90% in the first half of 2026, compared with almost 90% for the full year in 2025. This broad support contrasted with growing resistance to golden parachute proposals, with investor backing falling from 84% in the first half of 2025 to 77% in the first half of 2026.