Albert Larsson, Head of Data & Intelligence at Allshares, recently presented the findings from our latest S&P 500 compensation benchmarking report. Based on the most recent publicly available proxy statements as of June 2026, the data points to a clear shift: executive pay is stabilizing after several volatile years, while compensation programs are becoming more sophisticated, performance-driven and competitive.
Here are the report's three key takeaways.
1. CEO Pay Stabilizes with Performance Alignment
After several years of post-pandemic volatility, CEO pay began to normalize in 2026. Median total compensation across S&P 500 companies rose 5.6% to approximately $16.5 million. This was a more measured increase than last year's 10% rise and broadly in line with historical averages.
While pay growth may be stabilizing, CEO compensation remains heavily performance-based. Base salary now represents just 3% to 8% of total CEO compensation, while 85% to 93% is delivered through variable, performance-based awards. Long-term incentives remain the largest component, accounting for approximately 76% of total compensation.
This structure keeps executives' "skin in the game" tied directly to company performance. It also reflects continued say-on-pay scrutiny and boards' focus on aligning executive compensation with shareholder outcomes.
To manage the risks associated with performance-based pay, boards are adopting more sophisticated plan designs. Key approaches include:
- Combining multiple incentive vehicles
- Extending restricted stock vesting periods
- Linking performance share units to relative total shareholder return (TSR)
Relative TSR is now used as a long-term performance metric by approximately 70% of S&P 500 companies.
2. Sector Divergence Is Widening, and the Fight for AI Talent Is Reshaping Pay Strategy
Executive pay strategies vary significantly by industry, and the gap is widening. Technology companies continue to offer the largest pay premiums and the most equity-heavy packages. Long-term incentives account for approximately 80% of total compensation for technology CEOs, sometimes through one-time "mega-grants" tied to ambitious market capitalization or revenue targets.
More conservative sectors, including Utilities, Energy and Materials, take a different approach. Their compensation packages typically place greater emphasis on fixed pay and short-term cash incentives, prioritizing predictability over potential upside.
Competition for AI talent is putting pressure on these traditional industry models. CTO and CPO roles experienced some of the highest executive turnover in 2025, with approximately 25% of companies in the report replacing executives in these positions. Many moved into industrial and energy companies, showing that competition for technology leadership now extends well beyond the technology sector.
Companies outside of technology do not need to replicate this equity-heavy model. Instead, they should clearly communicate the value of what they can offer, including:
- Higher fixed compensation
- More predictable short-term bonuses
- Less exposure to market volatility
This competitive pressure is also affecting finance leadership. The report recorded the highest level of CFO turnover in S&P 500 history this year. Contributing factors included elevated CEO turnover and increased demand for experienced executives amid continued economic and geopolitical uncertainty.
3. Incentive Metrics Are Evolving, and Benefits Matter
Short-term incentive plans are becoming more complex. The average company now uses five performance metrics in its annual bonus program, and companies using five or more metrics tend to report stronger payout outcomes.
Financial performance remains the primary focus. EBITDA carries approximately 43% of the weight in CEO bonus outcomes, while more companies are introducing metrics tied to AI adoption and operational efficiency.
ESG metrics remain a smaller factor. They account for just 8% to 9% of payout weight and are concentrated primarily in governance goals rather than environmental or social targets.
Long-term incentive plans are also receiving greater scrutiny. Despite investor pressure to use more performance-contingent awards, time-vested stock options remain the most common LTI structure. They are used for 44% of CEOs and 43% of other executives, typically with a standardized three-year vesting schedule.
As plans become more complex, boards are applying greater rigor to their design and administration. This includes increased compliance review under frameworks such as Section 409A to reduce corporate risk.
Benefits also play a meaningful role in executive compensation:
- The average executive benefits package is now valued at $253,000.
- Large-cap executives receive approximately four times the benefits value of their small-cap peers.
- Personal security benefits roughly quadrupled in value this year.
Benefits can be overshadowed by larger equity awards, but they remain a cost-effective and often underused tool for attracting and retaining executive talent.
The Bottom Line
Executive compensation is normalizing in scale while growing in complexity. Boards are using more performance metrics, increasingly sophisticated plan structures and more precise peer benchmarking.
As Larsson emphasized, the greatest value comes from micro-benchmarking. Companies should evaluate compensation within the context of their sector, size and talent market rather than treating the S&P 500 as a single, uniform benchmark.
Want the complete data set? Read the full report.
