European CEO Pay Jumped 12% in 2025 — But at What Cost?

Jan de Vries · 2026-10-30

European CEOs just got a 12% raise. In 2025, their pay jumped by double digits, even as the gap between executives and workers widened. That's according to recent research that also asks a tough question: do bigger incentives actually make companies perform better, or do they just make the rich richer? If you're an entrepreneur building a startup in Europe, this isn't just gossip. It's a signal about how the rules of the game might be shifting — especially as the EU Inc proposal aims to make it easier to incorporate and scale across the continent. ### The 12% Raise That's Turning Heads First, the numbers. CEO pay across Europe rose 12% in 2025. That's a hefty bump, especially when many workers are seeing raises that barely keep up with inflation. The research behind this finding doesn't just report the figure — it questions whether these outsized incentives are actually tied to performance. Here's the thing: when a CEO's pay is tied to stock options or bonuses, they're motivated to hit short-term targets. But that can lead to decisions that boost the share price today and hurt the company tomorrow. And when the gap between the corner office and the shop floor gets too wide, morale takes a hit. Employees start to wonder if they're all in it together — or just cogs in a machine. ### What This Means for Startup Founders Now, you might be thinking: "I'm running a startup, not a multinational. Why should I care?" Fair question. But here's the connection. The EU Inc proposal is designed to create a more unified startup ecosystem across Europe. That means more cross-border hiring, more investment flowing in, and more pressure to compete for top talent. If CEO pay keeps climbing while worker pay stagnates, it could make it harder for startups to attract and retain the people they need. After all, why would a talented engineer join your startup if they feel the rewards are stacked against them? ### The EU Inc Proposal: A Double-Edged Sword? The EU Inc proposal aims to simplify incorporation across EU member states. Think of it as a "28th regime" — a set of rules that would let companies operate across borders without dealing with 27 different legal systems. For founders, that's huge. It could mean less red tape, easier access to funding, and a bigger talent pool. But it also raises questions. If it becomes easier to scale, will we see more companies adopting aggressive executive pay packages to attract big-name leaders? Or will the EU use this as an opportunity to push for more equitable pay structures? > "The question isn't whether CEOs deserve to be paid well. It's whether the system is designed to reward performance or just privilege." That's the heart of the matter. And as the EU Inc proposal moves forward, it's worth keeping an eye on how it addresses pay transparency and inequality. ### What Should Founders Do? So, what's the takeaway for you? First, pay attention to these trends. They could affect everything from your hiring strategy to your investor conversations. Second, consider your own pay philosophy. Even as a startup, you can set a precedent for fair and transparent compensation. Here are a few practical steps: - Stay informed about the EU Inc proposal and how it might change incorporation rules. - Think about how you structure incentives — not just for executives, but for all employees. - Be transparent about pay. It builds trust and can be a competitive advantage. At the end of the day, the 12% raise is a symptom of a larger conversation about fairness and performance. And as Europe rethinks how companies are built and governed, founders have a chance to shape what comes next. So, what do you think? Is CEO pay out of control, or is it just the price of leadership? Let us know in the comments.