The Gulf Executive Reward Report 2026

This report examines how boards across the Gulf structure and set senior executive reward in 2026, from base salary and annual bonus through to long-term incentives, benefits and severance. It matters now because the region's listed-company reform, IPO pipeline and tightening governance expectations are beginning to reshape pay structures that were, for a long generation, built almost entirely on cash. For chairs, remuneration committees and the executives they recruit, the terms of the conversation are shifting, and the firms that read the shift early will hold an advantage in the contest for scarce leadership.

What is in a typical executive reward package?

At its simplest, an executive reward package in the Gulf is the total set of financial terms a board offers a senior leader in exchange for accountability and results. It combines a fixed element that the executive can rely on, a variable element tied to annual performance, and, increasingly, a forward element designed to align the leader with the medium-term value of the business. Around that core sit benefits, allowances and the terms that govern how the relationship ends. The balance between these parts is where governance, culture and market practice all meet.

The distinctive feature of Gulf packages has historically been how much weight sits in the fixed and allowance-based portion. Housing, schooling, travel and other allowances have often formed a material share of an executive's total reward, reflecting an expatriate labour market and a tax environment in which gross and net pay are close to identical. That is still true for many roles. What is changing is the appetite, particularly among listed and IPO-bound companies, to move part of the package into performance-linked and longer-dated instruments rather than paying for everything in guaranteed cash.

In JOH's own executive search practice, we see this most clearly at the point of offer. Many established Gulf roles still carry little or no long-term incentive, leaving base salary and allowances dominant, while at the listed and IPO-bound end of the market the mix is moving toward a target annual bonus of around 50% of base and long-term incentives of around 100% of base, a roughly 40/20/40 split of base, bonus and long-term incentive across total reward. The headline number still anchors most negotiations, but the composition behind it is now a live topic in a way it was not five years ago.

What are the components of executive compensation?

Executive compensation is conventionally built from five components, and it is worth being precise about each. The first is base salary, the fixed annual cash sum that recognises the scope and seniority of the role and underpins everything else, including how bonus and pension-style benefits are often calculated. Base salary is the least contingent element and, in the Gulf, frequently the largest single line in the package.

The second is the annual bonus, a short-term incentive paid against performance over a single financial year and typically expressed as a percentage of base. This is the primary vehicle through which pay for performance operates in most regional companies today. The third is the long-term incentive, the long term incentive plan or LTIP, which rewards value created over a multi-year horizon, usually three years or more, through equity, share options, performance shares, or deferred cash where a company is unlisted and cannot grant stock. The fourth component covers benefits and allowances, the housing, schooling, medical, transport and relocation provisions that remain a substantial and often negotiated feature of Gulf packages. The fifth is severance and termination terms, including notice periods, end-of-service gratuity and the treatment of unvested incentives on departure.

Figure 01FIG-01

The five components of executive reward

Component	What it is	In the Gulf
Base salary	Fixed annual cash for the scope of the role	Often the largest single line in the package
Annual bonus	Short-term incentive against one year's performance	The main pay-for-performance vehicle today
Long-term incentive (LTIP)	Equity, options or deferred cash over 3 years or more	Historically thin, now emerging at the listed end
Benefits and allowances	Housing, schooling, medical, transport, relocation	Substantial and frequently negotiated
Severance and termination	Notice, end-of-service gratuity, treatment of unvested awards	Where value is quietly won or lost on exit

The way these five components are weighted tells you a great deal about a company's governance maturity. A business that pays a high base and a modest discretionary bonus, with no long-term plan, is signalling something quite different from one that holds base steady and puts real reward behind multi-year, equity-linked performance. The direction of travel in the Gulf is slowly towards the latter, and a board that understands the signal can use the shape of its packages to say something deliberate about the kind of company it intends to be.

How is Gulf executive pay different, and how is the mix shifting?

The clearest structural difference is the relative absence, historically, of equity and long-term incentives. Gulf executive pay has leaned more heavily on cash and allowances and less on equity and deferred instruments than comparable roles in the United States or the United Kingdom, where a large share of chief executive reward is routinely delivered in performance shares vesting over several years. Global reward consultancies including Mercer, Aon, Deloitte and WTW publish Gulf and GCC benchmarks that document this pattern, and Aon in particular has argued the case for more equity-based and long-term incentive pay in the region.

Figure 02FIG-02

How the pay mix is shifting

Share of total reward

BaseBonusLong-term incentive

Gulf, typical today (illustrative)

Gulf, listed / leading-edge (JOH estimate)

US / UK large-cap (illustrative)

Several factors explain the difference. Many of the region's largest employers have been government-related entities or family-controlled groups where equity was simply not available to grant, so cash did the work that shares do elsewhere. The tax environment removed one of the technical reasons that other markets structure deferred and equity pay so carefully. And a shallower pool of listed companies meant fewer boards were subject to the disclosure and shareholder-approval mechanics that, in London or New York, tend to push reward towards long-term, performance-tested structures.

That picture is now changing, and the catalyst is the market itself. A deeper IPO pipeline across Saudi Arabia and the UAE, more listed companies, and stronger disclosure requirements are gradually shifting practice towards genuine long-term incentives. As more of the C-suite comes to expect equity, the companies that cannot offer it find themselves at a recruiting disadvantage, a dynamic we see directly in our finance and operating leadership mandates.

Does reward vary by sector?

It does, and the variation matters for any board benchmarking a package. Government-related entities and sovereign-linked platforms have tended to lead on scale of cash reward while lagging on equity, because their ownership made share-based pay difficult, though many are now adopting deferred and phantom-equity mechanisms to compete. Financial services, particularly in the DIFC and ADGM, sit closest to international practice, with more developed bonus and long-term-incentive structures and the disclosure habits that come with regulation. Family-controlled groups vary the most, from those that still pay almost entirely in cash and allowances to those that have introduced sophisticated long-term plans as they professionalise and prepare for external capital.

Energy, industrials and the giga-project cluster occupy their own space, where the scarcity of proven operators at scale pushes the guaranteed portion of reward especially high and where retention over a multi-year build is the dominant concern. The practical implication is that there is no single Gulf benchmark. A board must know which comparator set is relevant to its ownership, sector and listing status before it can judge whether a package is competitive, and an executive should understand the same before assuming a number is generous or thin.

Why is executive pay so high?

Gulf executive pay is high for reasons that are partly structural and partly about supply and demand. On the structural side, the near-absence of personal income tax means that headline reward translates almost directly into take-home pay, so nominal numbers that would look generous elsewhere are, in net terms, simply the market rate for scarce leadership. Boards competing for a small pool of proven regional operators price accordingly.

The scarcity is real. The region is executing large, complex transformation programmes across energy, finance, technology and giga-projects at the same time, and the number of executives who have actually delivered at that scale, in that context, is limited. Where a company needs a leader who can combine international standards with genuine local fluency, the premium rises again. This is compounded by the mobility of senior talent, who can and do move between Dubai, Riyadh, Abu Dhabi, Singapore and London, forcing employers to benchmark against several markets at once rather than one.

The result is that reward, and especially the guaranteed portion of it, sits high by global standards even before long-term incentives are added. In JOH's search work, this shows up in the mechanics of the offer as much as the total. Sign-on and buy-out arrangements are more common in some sectors than others and are becoming more frequent, though still far from universal, and notice periods are lengthening for the most contested roles. Understanding those mechanics is exactly what separates a well-negotiated appointment from a costly one, a theme we develop in our interview guide on negotiating an executive job offer.

Cash still does most of the talking in Gulf pay, but the conversation is changing. The leaders we place now ask about equity and the long term, not just the number at the top of the offer.

How are remuneration committees and disclosure changing?

The remuneration committee is becoming a more serious institution in the Gulf boardroom. As listing rules mature and investor scrutiny grows, more boards are constituting properly independent committees with a genuine mandate to set policy, test pay against performance, and justify their decisions to shareholders rather than simply ratifying management proposals. Market regulators are reinforcing this. The Saudi Capital Market Authority and the DFSA governance frameworks are strengthening expectations around governance and remuneration disclosure, and comparable momentum is visible across ADGM and DIFC-regulated entities.

Disclosure is the mechanism that changes behaviour. Once a company must publish how its executives are paid and connect that to results, the discipline of pay for performance stops being aspirational and becomes something a committee has to defend in public. That, in turn, tends to favour structures with clear, measurable long-term metrics over open-ended discretionary bonuses, and it raises the standard of the benchmarking and advice that committees commission from firms such as Mercer, Aon, Deloitte, PwC and WTW.

For executives, the practical effect is that reward is becoming more legible and more contractual. The days when a senior package could rest on an informal understanding with a chairman are receding. This is part of a wider professionalisation of the Gulf C-suite that we track in our companion research, including the reports on AI governance in the Gulf boardroom and on nationalising the Gulf C-suite.

What this means for executives weighing an offer

For the leaders being recruited, the shift changes what a strong offer looks like. Five years ago the decisive question was the size of the guaranteed number. Increasingly it is the shape of the package: how much is genuinely at risk, what the long-term instrument is actually worth and when it vests, how a buy-out of forfeited awards is structured, and what happens to unvested value if the relationship ends. An executive who negotiates only the base is now leaving some of the most important terms on the table.

The practical advice we give candidates is to read the whole structure before the headline. A slightly lower base with a real, well-designed long-term incentive can be worth considerably more than a higher base with no upside, particularly in a listed or IPO-bound business where the equity is where the value compounds. Understanding the mechanics, vesting, performance conditions, leaver provisions and the treatment of allowances, is what turns a good number into a good decision, and it is the substance of our guidance on negotiating an executive job offer.

A forward view: where Gulf reward goes next

The direction is set, even if the pace is uneven. Over the coming years we expect the fixed and allowance-heavy package to give ground steadily to structures that hold base salary at a competitive but not runaway level and place more reward behind multi-year, performance-tested incentives. Listed companies will lead, IPO candidates will follow because investors will expect it, and government-related entities will adopt deferred and phantom-equity mechanisms to compete for talent that increasingly asks about the long term.

None of this means cash stops mattering. In a tax-free, high-competition market, the guaranteed number will remain the centre of gravity in most negotiations for the foreseeable future. What changes is that it will no longer be the whole story. The most sophisticated Gulf boards are already using the full toolkit, base, bonus, long-term incentive, benefits and carefully drafted severance, as an integrated instrument for attracting and retaining leaders, and they are governing it through committees that can stand behind their choices.

For chairs and remuneration committees, the strategic question for 2026 is no longer whether to introduce long-term incentives, but how quickly, in what form, and against which metrics. Getting that right is now a competitive variable in the contest for the region's scarce senior talent.

Note on data: figures in this report are drawn from JOH Partners' mandate book and reflect professional estimates across our Gulf search practice.

Key findings

• Gulf executive reward remains anchored in cash and allowances, but listed-company reform, IPO activity and disclosure requirements are steadily shifting weight towards equity and long-term incentives.
• The five components of executive compensation are base salary, annual bonus, long-term incentive, benefits and allowances, and severance and termination terms; the weighting between them signals governance maturity.
• At the leading edge, listed and IPO-bound Gulf packages are moving toward a roughly 40/20/40 split of base, bonus and long-term incentive, while many established roles still carry little or no long-term incentive.
• Reward varies by sector: financial services sit closest to international practice, government-related entities lead on cash but lag on equity, and family groups vary most.
• Pay levels are high largely because near-zero personal tax converts headline reward into take-home pay, and a small pool of proven regional operators is being competed for across several markets at once.
• The Saudi Capital Market Authority, DFSA, ADGM and DIFC frameworks are strengthening remuneration disclosure, professionalising remuneration committees and reinforcing pay for performance.
• For executives, the shape of the package now matters as much as the headline, making the mechanics of long-term incentives and leaver terms central to a well-negotiated offer.

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JOH Partners runs senior leadership and board mandates across the Gulf's six principal sectors. For confidential conversations on executive reward, remuneration-committee design and the structuring of long-term incentives, contact the partners directly.