UAE and Saudi companies use long-term salary bonuses to attract CEO talent

More than half of chief executives in the kingdom receive more than six months’ basic salary in the form of incentives, Cooper Fitch report finds

Long-term compensation incentives are not sector-specific in the Gulf, according to Cooper Fitch. Pawan Singh / The National

More companies in the Gulf are using long-term incentive plans to attract and retain top talent, a new report has found.

More than half – 56.5 per cent – of chief executives in Saudi Arabia now receive LTIPs, compared to 35.3 per cent in the UAE, according to recruitment consultancy Cooper Fitch’s 2025 CEO Report, which was released on Tuesday.

About 18 per cent of chief executives in the kingdom reported receiving nine to 12 months’ salary as LTIs, while their counterparts in the UAE rely on short-term incentives instead. Among those receiving LTIs in the Emirates, 14 per cent reported LTI exceeding one to six months’ salary, the report revealed.

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Short-term incentives are annual bonuses while long-term incentives are commonly given over the span of three to five years, according to Jack Khabbaz, managing partner and head of CEO practice at Cooper Fitch.

“LTIs are additional to the annual bonus and fixed salary, and it could be designed as a cash bonus, shares, equities, options or profit sharing," he told The National.

“They are designed for many reasons: to retain leaders in their position for a period of time, to attract leaders, to drive the results and achieve the board’s objectives, to drive value creation, increase market share, profitability, expansion and share price.”

“It's one thing to bring in a chief executive for one or two years, that's not where the magic necessarily happens. It's a journey to transform and lead an organisation, so it's critical that LTIs are in place to reward chief executives for their stewardship of this journey.”

The formula to set LTIs can depend on how conservative fixed income and short-term incentives are, Mr Khabbaz said.

“Anything from six to 24 months’ worth of basic salary could be paid at that time – again depending on the size and scale of growth and value creation,” he said.

“In Saudi Arabia, over 50 per cent of chief executives would have well over six months’ worth of basic salary paid as LTI. In the UAE, it wouldn't be as high at private sector entities, but publicly listed companies offer between 12 to 24 months’ basic salary as LTIs.

“A lot of entities in Saudi Arabia are either restructuring, transforming, or in greenfield or brownfield, start-up or scale-up mode, so the size, scale and the opportunity of the business life cycle they're in, tend to be the reason for that, versus many organisations in the UAE private sector.”

Jack Khabbaz, managing partner and head of the CEO practice at Cooper Fitch, says short-term incentives are annual bonuses while long-term incentives are commonly given between three to five years. Courtesy: Cooper Fitch

He added that long-term compensation structures are not sector specific. Globally, more than 90 per cent of publicly listed chief executives will have a LTIP programme, and over 60 per cent in the private sector would also have this remuneration. It's common practice, regardless of whether you're in real estate, energy, consumer goods or financial services, Mr Khabbaz said.

It is important that leaders are incentivised to stay through the journey and lead the growth and meet the objectives set out by the board, he added.

Common benefits offered to chief executives in the Gulf are school allowances, family flight tickets twice annually to go home, VIP medical insurance, life insurance and perhaps some other allowances, according to the Cooper Fitch executive.

Bonuses, both short term and long term, depend on the performance of the employee and the organisation. The better you're performing and meeting objectives, you're going to be rewarded better, said Mr Khabbaz.

About 83 per cent of chief executives in the Gulf are receiving or expecting a performance-related payout this year, the Cooper Fitch report found.

Saudi Arabia Salary Guide 2025

Check out our salary guide below for a snapshot of how much you can expect to be paid monthly in your sector in 2025, based on Michael Page data.

However, fewer executives are seeing year-on-year increases, with 46 per cent reporting a higher payout – down from 56 per cent in 2024 – while 41 per cent will receive the same bonus as last year. Meanwhile, 13 per cent of chief executives have experienced a reduction, up from 8 per cent in 2024.

Higher-value bonuses – nine to 12 months’ salary – are more common in Saudi Arabia, according to the study.

In the kingdom, 34.8 per cent of chief executives received bonuses equivalent to four to six months’ salary, while in the UAE, the most common bonus bracket – 43.3 per cent – was lower, at one to three months’ salary, according to the survey.

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Recruitment and retention of skilled professionals are key concerns for chief executives in the Gulf, alongside geopolitical uncertainties and macroeconomic pressures, the Cooper Fitch research found.

Almost all chief executives polled – 93 per cent – expect revenue to increase this year.

Many companies continue to rely on external hiring to fill chief executive roles, particularly in the UAE, indicating a shift towards getting leadership with broader regional or global expertise, the report showed.

Chief operating officers remain the most likely internal successors, especially in Saudi Arabia, where companies are more inclined to promote from within, it added.