When experienced leaders consider leaving, pay may be part of the reason. In high-growth businesses, responsibilities can change faster than salary benchmarks or reward structures. Leaders should review whether remuneration reflects the role as it is now, not as it was when the package was set.
That review should consider reliable market data, measurable contributions to long-term value and the effect of incentives on retention and growth. It should also test whether pay is fair across the organisation, affordable for the business and clear to those affected. I advise growing businesses to decide in advance which measures matter and when a review is warranted. This is general information, not financial, legal or investment advice.
Why Executive Pay Falls Behind in High-Growth Industries
In high-growth industries, executive pay can lag behind the business as its value and leadership demands change.
Executive pay can lag behind a growing business because compensation is often set using last year’s revenue, headcount or market benchmarks. Yet the company’s value and the demands on its leaders may change much faster. The result is a growing gap between pay and the scale of decisions executives are expected to make.
Annual budgets can make that gap harder to address. Boards may also rely on outdated survey data or broad industry averages that don’t reflect the demands of specialised roles. Review whether your benchmarks still fit the business, and consider how growth has changed each executive’s responsibilities.
In my experience, incentives work best when they’re tied to measurable value creation. If leaders deliver results that materially strengthen the business but see little corresponding reward, retention may become a concern. Set clear measures, review them as conditions change, and assess whether the overall package supports the leadership your next stage of growth requires.
Strong talent governance helps identify misalignment early and gives boards a sound basis for compensation decisions. This is general information, not financial, legal or investment advice.
Build a Competitive Executive Pay Package
Once you have identified a gap between executive pay and the demands of growth, design a package that can attract and retain the leaders your business needs.
Start by comparing base salaries with those at relevant organisations. Consider industry, business stage, location and the scope of each role. Use current compensation data to set credible ranges, and be clear about how much flexibility you have.
Salary is only one part of the offer. Decide how to balance it with annual incentives, equity and benefits. Link short-term rewards to measurable priorities that leaders can influence, such as revenue quality, product delivery or talent retention.
Standard plans won’t suit every candidate or business. Consider tailored benefits or flexible incentives where they address a genuine need, while keeping the package affordable and consistent with your wider pay principles.
I advise growing businesses to check that incentives support the same strategic priorities across the leadership team. Review outcomes regularly, including whether rewards are fair and whether the package remains competitive as the business changes.
Link Executive Rewards to Long-Term Growth
A meaningful share of executive pay should depend on results that build lasting business value, not just quarterly performance. Consider rewarding sustained revenue growth, product innovation, customer retention and disciplined investment.
Set measurable goals over several years. Establish clear baselines and, where useful, compare performance with relevant peers. Choose measures that reflect your strategy and are within executives’ influence.
The board should review the measures regularly, test whether they still support the organisation’s priorities and adjust them when major market changes make the original targets less relevant. I’ve found that clarity matters: executives should understand how performance affects rewards and why each measure has been chosen.
Keep Executive Rewards Fair and Affordable
Long-term incentives are most effective when executives regard them as fair and the organisation can afford them. To protect both, compare awards with those of relevant peers and test their cost under a range of growth scenarios.
Track dilution, cash impact and realised pay alongside performance. Choose measures that reflect your strategy, and make clear how each one will influence future awards.
Set approval limits, review cycles and rules for exceptions before granting awards. Give the compensation committee independent information and keep a clear record of its decisions.
If results or forecasts change, explain how that will affect future awards. Avoid ad hoc promises. This discipline can help retain leaders while preserving investor trust and financial flexibility.
Conclusion
Treat executive remuneration as a strategic investment, not a fixed expense. Benchmark pay against relevant, current data, then link rewards to outcomes that matter: sustainable value creation, customer retention and disciplined growth.
Review targets as the business develops. Make sure they remain demanding but achievable, and explain how each pay decision supports the organisation’s strategy. I advise growing businesses to balance competitive rewards with affordability and clear governance.
Done well, remuneration can keep leaders focused on the company’s long-term interests. It should develop alongside the business, not lag behind it.
