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Unilever has stated that restrictive UK rules regarding executive compensation are making it difficult to attract top executive talent from the US.
The company, known for a whole host of household name products in food, and tolietries, claims that stringent governance and pay policies prevent it from offering competitive packages to highly qualified candidates for leadership positions in America.
Susan Kilsby, who leads Unilever’s remuneration committee, insists in the latest annual report that the UK’s limitations on executive pay put the company at a disadvantage when competing for global talent.
Over the past year, the conglonmerate says it encountered several US candidates whose current salaries would be impossible to match without causing significant disparities or compression among its pay structure.
This issue arises because recruiting certain US executives would require offering them much higher compensation than their British counterparts.
As a result, Unilever is urging shareholders to approve increased pay for its leadership team, including Fernando Fernandez, who became CEO after Hein Schumacher stepped down last year.
Fernandez’s total compensation for 2025 is estimated at €5.6million (£4.8million, $6.5million), which includes an annual bonus of €1.75 million. If Fernandez achieves his performance goals in 2026, his earnings could reach €10 million. Should he exceed those targets and Unilever’s share price rises by 50%, his potential payout could climb to €23.8 million.
Pay scrutiny reshapes executive strategy
Despite these figures, Unilever believes the current compensation levels are insufficient. The company announced in its annual report that it will reassess its remuneration policy a year ahead of the usual three-year schedule.
The firm has consulted extensively with major shareholders, institutional investors, and proxy advisers to gather feedback on its pay structures and market challenges. Most of those consulted supported the proposed changes.
But, hang on a minute. Is there actually a law to stop CEO pay from rising too high in the UK? Not exactly. There’s no official cap, but with new transparency rules, all large companies (250+ employees) must now publish their 'Pay Ratio' - a comparison between the CEO's total pay and median as well as lower-quartile earnings for the company’s UK workforce.
It empowers investors to hold boards accountable - especially during annual “Say on Pay” votes. Since 2024, shareholder activism everywhere has surged, with many major investors opposing pay proposals they see as excessive. New rules also push boards to explain how employee pay informed their executive decisions, discouraging unchecked pay packages.
Rising CEO pay challenges ‘pay limits’ claim
Let’s be clear. At the start of 2026 the bosses of UK FTSE 100 companies made more money before midday on Tuesday 6 January than the average worker will all the rest of this year.
Median annual pay for FTSE 100 chief executives is £4.4million ($5.8million), the High Pay Centre calculates, 113 times higher than the £39,039 earned by the median full-time worker.
That means UK bosses exceeded the average annual pay of staff in less than 29 hours of work, according to the think tank. The median salary for FTSE 100 chief executives equates to £1,353.23 an hour, or nearly £23 a minute.
In 2026, executive compensation in the UK has entered a new era defined by intense international competition for top talent and stronger demands for accountability from shareholders. The UK, leveraging post-Brexit regulatory flexibility, has moved away from the days of straightforward cash bonuses.
Instead, today’s CEO pay packages rely heavily on long-term incentives that tie rewards to financial strength and achieving sustainability goals.
The issue of executive pay - especially the gap between CEO earnings and average UK employees - remains a hot topic. The latest reports show that the average FTSE 100 CEO is earning over £4.5million (£6million), a figure that’s stabilized at a historic high.
That widening pay gap is mostly justified by boards who want to retain CEOs capable of steering companies through inflation, tech disruption, and fierce competition, especially from US S&P 500 firms, where pay can climb even higher.
Against that backdrop, Unilever's take seems an over-simplified reading of the situation. There is no official cap on CEO pay in the UK, and compensation at the top end already reaches multi-million-pound levels, with potential payouts far exceeding base salary through bonuses and long-term incentives.
At the same time, transparency requirements, Pay Ratio disclosures, and rising shareholder activism mean that executive compensation must be justified, structured, and aligned to performance. Recruiting US executives is not simply a question of matching headline salaries, but of navigating a system where higher pay must be defensible to investors and consistent with internal pay structures.
In that context, the challenge is less about whether global companies can compete on benefits packages, and more about in what form they deliver them.
