Compensation Trends Report 2027

Salary index: Market benchmark movement 2023-6

Salary growth continues across roles, but the pattern differs by level. Mid-level IC (P3) pay is rising fairly consistently across markets (1-8% growth), but Senior Manager (M3) growth is far more uneven – UK benchmarks rose 12-16% across all three roles, while Software Engineering M3 pay fell in the Netherlands (-2.4%) and France (-4.9%).

For how AI Engineering benchmarks compare to these figures, see Chapter 4.

Expert view 1/6

“What I’m seeing is a significant shift in the European tech talent market. Ten years ago, Poland, Romania, and Bulgaria were still largely viewed as outsourcing destinations, where companies could access strong technical talent at a lower cost. But in 2026, in highly skilled areas such as AI or developer tooling, salary expectations have caught up with more established markets like Germany.”

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“There used to be a real ceiling on cash comp by stage, but I’m now seeing seed-stage salaries that compete with Series B. It’s partly a hot VC market, and partly a conviction you can build a company with far fewer people who are compensated accordingly.”

“With pay transparency coming, you can’t underpay new hires anymore even if the market is employer-favourable – you’d create a salary gap you can’t sustain long-term. So ironically, that legislation is actually keeping salaries up a little, even as the economy softens.”

On Engineering

“A lot of companies aren’t growing their software development teams anymore. They’re keeping the team they have and increasing efficiency through AI instead – so the role is only going to get smaller and less needed.”

On Engineering

“For engineers equity has become the real bargaining chip in the process. It’s become the go-to leverage point in negotiations.”

On Product Management

“Every tech company right now needs disruptive change to their product with AI. A great product manager who understands product-market fit and can drive the company forward might be the most strategically important role there is at the moment.”

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Benchmarking strategy

Geographic pay

56% of companies localise salaries to each market using local benchmarks, and a further 10% apply a geographic pay differential – together, two-thirds are actively adjusting pay by location rather than paying one global rate.

Expert view 1/2

“One very savvy founder raised a real concern with me recently: if we localise pay, what stops people moving country just to get a higher salary? If you support those relocations it’s an administrative burden, and your people might start focusing more on optimising their pay than their work.”

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“Internal mobility can solve a lot of the tension with paying differently per location. Giving people the choice to apply for roles in a different location, that may have a higher cost of living, helps people feel that they have choice, rather than feeling stuck.”

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Market positioning

Just under two-thirds of European tech companies (63%) say that they primarily target the market median for base salaries, with the next most popular choice being the 75th percentile (12% of companies) – meeting the market remains the default for pay positioning.

Expert view

“The market data you buy is one data point, not the truth. I always tell clients: take market data as an orientation, but define your own bands based on your own logic and business strategy. If you’re totally off market you’ll see the early signals through hiring.”

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Expert view 1/2

“Early on, companies throw money at the people they need – it’s a gut-feeling, get this person now approach. That comes back to bite you later, when employees start asking uncomfortable questions and you need to bring in structure and consistency on top of all those ad hoc decisions.”

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“Your first 50 employees make or break your company. It’s not a general 9-to-5 role – people go above and beyond, take a chance on you as much as you take a chance on them – and that extra effort needs to be rewarded, so I’m not surprised to see higher pay positioning.”

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Market positioning – per role

Whilst the market median is the most common positioning, many companies use different target percentiles across their workforce. Over a third (35%) target higher for engineering/technical roles, and a fifth (20%) for leadership roles – with most saying this is down to talent scarcity and role criticality.

Salary increases

Overall, 2026 salary increases tell a story of broader reach – more employees received a raise (20.8%, up from 15.7%). The median increase itself is stable, just slightly lower than it was last year (4.2%, down from 5.0%) – and with most companies planning flat budgets for next cycle, that looks set to continue.

In-role salary increases: employee eligibility

Eligibility continued to rise this year, with a sharp increase (+32.5%) to 20.8% of employees in European tech receiving a pay rise within their existing role in 2026.

Across locations, Germany saw the biggest increase in eligibility with double the amount of employees receiving an increase compared to last year, and late-stage companies saw the sharpest acceleration of any funding stage (+62.6%).

In-role salary increases: amount

Across European tech, the median in-role salary increase in the past year is 4.2%, down slightly from 5.0% the year before but still within the typical range of 3-5%.

What factors lead to a salary increase

Most companies weight individual performance (85%) and market adjustments (68%) most heavily when deciding who gets an increase and how much, well ahead of business performance (49%) or retention risk (39%).

Given the focus on performance, it’s unsurprising that most companies factor in higher pay increases for their top-performers – typically at least 2% higher.

Expert view

“We give a recommendation based on performance rating and where someone sits in their band, with a deliberate ratio between ratings – if an average performer gets one increase, a top performer might get double that. Managers can flex it, but the instruction is that the differentiation needs to be real.”

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Salary increase outlook – what are teams planning for the next 12 months?

Most companies are keeping pay increase budgets flat (43%) or are still unsure (22%). Only 6% are increasing significantly. Where budgets are moving, it's overwhelmingly about cost control (28%) and business performance (11%), not inflation or regulation.

Promotion increases

Promotion rate

In the last 12 months, the promotion rate in European tech was 2.7%, up from 2.4% the year before (+12.5%) – a modest increase in the number of employees receiving a promotion, after two flat years.

The biggest move across all breakdowns is Germany, where the promotion rate more than doubled this year (+110.0%, from a low base of 1.0%).

Late-stage companies also saw a higher increase in promotion rates (+50.0%), reversing a decline the year before. Both Germany and late stage companies were the two areas where salary increase eligibility increased the most too – both seeing significantly higher in-role and more promotion increases this year.

Promotion-based salary increases

The median salary increase employees receive at promotion is 21.8%, up slightly from 21.2% the year before (+2.8%) – continuing the slow upward trend from previous years.

Most companies lack a structured approach to promotion increases, with 78% deciding case-by-case, and where there is structure, it’s most common (13%) to promote to the bottom of the next band.

Expert view 1/2

“Moving everyone promoted to the bottom of the new band sounds neat, but it can mean a strong performer only gets a 5% bump while their peers doing the same job are paid 15-20% more. It shouldn’t be the only way you consider doing it.”

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“There should be an overall approach for promotion increases. We work from a set range depending on the type of promotion, with guardrails like a minimum comp-ratio in the new band and calibration to protect pay equity. But every person comes from a different starting point and context, so on top of that range managers can decide to be more aggressive for a specific case. It’s not pure improvisation, but it’s not rigid either.”

Promotion outlook – plans for the next 12 months

Nearly half of companies (49%) aren't changing their approach to promotions this year – but where they are, it's mostly about investing in career development (28%) and tightening who qualifies (27%).

Equity trends

Equity eligibility

Equity eligibility is diverging by market rather than moving in one direction.

UK companies are most likely to offer equity to all employees (58% vs 39% overall) and the Netherlands has seen a 3% increase in equity granted to all.

But France and Sweden look like they’re pulling back: all-employee eligibility down 2.3% and 2.9% respectively, whilst select-roles only and leadership roles only both rose in both locations.

Equity eligibility

ChartTable

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Europe (all)

Ravio dataset, 2024-2026

Equity design

Among companies that offer equity, there's no dominant approach to sizing grants – fixed share/option counts (36%) and percentage-of-salary (31%) are the most common, but case-by-case decisions (22%) is a significant portion too.

The lack of a clear default suggests that equity remains less structured and more bespoke than other elements of compensation in most companies.

Expert view 1/2

"At an earlier stage it's common to give equity to everyone, but once a company gets bigger, it's worth reviewing – both how much you can realistically grant, and whether equity is actually a driver of motivation for a given role. For a lot of roles, it just isn't."

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“What matters isn’t just the percentage of equity you’re offering today, but what that equity could realistically be worth at exit. Increasingly, executives are reverse-engineering their equity ask from the outcome they want to achieve.”

Equity outlook – what are companies changing in the next 12 months?

Most companies are leaving their equity approach untouched (64%).

Where it is changing, the direction of travel is still towards broader eligibility (11%) – but only just, with some companies also planning to restrict eligibility (10%). Less companies are making changes to their equity design itself.

Variable pay and bonus plans

Variable pay benchmarks

Across European tech as a whole, the median variable pay amount is 11.1% of base salary – with a range of 7.2% at P25 to 25.0% at P75.

Variable pay prevalence and size of course differ sharply by role – it’s near-universal and substantial for Direct Sales and some other commercial roles, but much less likely elsewhere.

What forms of variable pay are offered?

Commission remains the default for commercial roles (76%), but individual and company performance bonuses run a close second and third (49% and 48%) – and equity-based bonuses are the exception, not the rule (18% or lower).

For bonus schemes, a combination of individual and company performance (36%) is the most common way to size payouts.

Variable pay outlook – what are companies changing in the next 12 months?

Most companies are not planning to change their approach to variable compensation next year (67%), but those that are are mostly looking to further lean on variable as a lever, adding in new variable programmes (19%).

Expert view 1/3

"I'm actually starting to see a trend towards less bonuses, partly because they're time-consuming to administer and partly because they're hard to explain objectively and fairly. But for roles where you can define measurable targets, I think there's an underused opportunity to incentivise people that way."

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"I think we'll see more use of variable pay because of pay transparency. If you keep base salary similar and put performance differentiation on variable pay, you have a much clearer explanation for why pay differs – it's linked to each person’s results, rather than baked into base salary."

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“We’re introducing a business impact bonus for next year, specifically for people making a big contribution – and we’re particularly rewarding those using AI to create impact across the company.”

Benefit and working model trends

Employee benefits outlook – what are companies changing in the next 12 months?

Most companies will maintain their current approach to employee benefits (66%). For those that will make changes, adding additional benefits is the most common trend (20%) – with responses particularly highlighting the need to be more market competitive on benefits.

Where changes are planned, aligning with the market (24%) is the most common theme, followed by specific new benefits such as pension, parental, and health cover (15%).

Employee benefits package benchmarks in 2026

Wellness, family support, and pension are the three areas companies flagged as this year's focus for making changes benefits. Across all three, there are clear differences in typical approach per market.

Wellness benefits

Sweden and Germany stand out for fitness allowances specifically (89% and 61% respectively) while France (53%) and Spain (56%) are the only markets where a majority of companies offer no wellness benefit at all.

Family benefits

The Netherlands and Sweden have the lowest offering of family benefits (90% and 87% of companies offering none, respectively) – but likely reflecting already-strong statutory parental leave provision in these locations, highlighting the importance of a per-location view of employee benefits.

Pension contributions

Pension approaches vary considerably per location because of local laws. In the UK, almost half of companies (46%) offer enhanced pension contributions that go beyond the 4% statutory minimum – 5% being the next most common at 20%.

Working models

Overall, working model variety contracted this year, with the UK, Germany, and Netherlands all seeing declines across onsite, remote, and hybrid alike – meaning fewer companies offering multiple models at once.

Spain and Sweden bucked the trend in opposite directions: Spain polarised toward the extremes (fully-remote +100%, fully-onsite +129%, hybrid down), while Sweden consolidated around hybrid (+8%).

Working model split, 2025 vs 2026

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UK

Ravio dataset, 2025-2026

Expert view 1/3

“Changes in the US political and immigration landscape are making Europe increasingly attractive, and talent from Northern Europe is increasingly relocating south too. Spain is a particularly popular relocation destination, and as skilled international talent relocates there, more companies are expanding their presence too, strengthening Spain’s position as a serious up and coming tech talent market.”

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“I’m a massive advocate for giving people the flexibility to work in the way that’s most productive for them. That flexibility is hugely valuable for the individual, but it benefits the company just as much – when people can work in a way that suits them best, you’re much more likely to get the best out of them too.”

"Some companies tried going back to fully on-site and failed – and some of their best people left because they simply couldn't work like that – so now there's this settling around hybrid flexibility."

How many WFH days are hybrid employees allowed?

WFH allowances shifted only modestly this year, but the direction was consistent: fewer office days (1-2 per week) gained ground in most markets. Even so, giving hybrid employees the flexibility to work from home 5 days per week remains by far the most common arrangement everywhere, ranging from 34% in France to 63% in Germany.

Working-from-home days allowed for hybrid employees

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UK

Ravio dataset, 2025-2026

Working model outlook – what are companies planning for the next 12 months?

Fully remote companies are the most settled – 100% report no change planned (of 16 respondents). Hybrid companies are most likely to be making changes, overwhelmingly moving toward more office time (17%), not greater flexibility (4%).

Executive salaries

CEO salary benchmarks

Executive variable pay

Executive variable pay prevalence

Overall, 91% of VPs (E1) in European tech get a bonus, and 89% of C-suite executives do – and it’s particularly likely for executives to receive a bonus in private equity backed and public companies.

Interestingly, where companies don't offer a bonus, it's not that they're compensating with a different lever – rather, those companies tend to run a more conservative package overall. We found that executives without a bonus also report significantly less annual equity (£45k median, vs £250k for those who do get a bonus).

Executive variable pay benchmarks

Bonus criterion – what are executives targeted on?

The general pattern across functions is that VP bonuses lean individual, while C-level bonuses lean company-wide – Finance is the sharpest example, swinging from 67% individual-targeted at VP to 47% company-targeted at CFO level.

Late-stage VPs are the most individually targeted of any cut (62%), while C-level bonus criteria stay largely dependent on company targets across every funding stage (51-63%) regardless of maturity

Executive equity

Executive equity grant values

76% of executives receive an equity grant across the European tech industry – slightly more likely at VP level (77% of executives) compared to C-level (75%).

Executive equity design

Equity vehicles for executives

Equity vehicles shift predictably with maturity – RSUs dominate at public companies (83% for VPs), while stock options remain the default earlier on.

The proportion of RSUs at public companies drops to 59% at C-level, with an increase in variety of vehicles, including a notable step-up in ordinary shares (6%, the only stage where this appears).

Equity vesting for executives

The standard 4-year time-based schedule dominates everywhere except private equity-backed companies, where it drops to just 41% for VPs – replaced largely by a mix of time-based and KPI-based vesting (35%, versus 1-2% at every other stage), reflecting PE's more return-focused ownership culture.

Early-stage companies lean far more on quarterly vesting for VPs (36% vs 0% at late-stage) – late-stage vesting is almost entirely monthly (94%) or annual, perhaps using more frequent vesting events to keep pace with faster-changing cap tables.

Founders vs hired executives

Founders take a clear cash-for-equity trade. Founder C-level base salary sits 21% below hired executives (£152,500 vs £193,900), and founders have essentially no bonus (0% median variable vs 33% for hired executives).

But, their annualised equity grants run 2.4x higher (£305,400 vs £125,000 median) – more than making up the difference if the company performs. These figures likely exclude founders’ original ownership stake, so their total equity is probably also far larger than this figure.

Executive pay outlook – what are companies planning for the next 12 months?

61% of companies have no changes planned to executive pay – where they are moving, it's more about what bonuses are tied to (18%) and re-benchmarking to ensure market competitiveness (17%) than restructuring the pay mix itself.

Benchmark your executive team Ravio covers executive compensation benchmarks for base salary, variable, and equity across more functions, markets and funding stages.

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Gender pay gap progress

The unadjusted gender pay gap across European tech currently stands at 20%, holding flat on last year (20%) after a jump from 16% in 2024.

But the adjusted gap – comparing like-for-like pay across employees at the same level, company, and country – has reduced to 1%. With pay for the same role at the same level close to equal, the headline 20% figure is being driven by where women are represented within the workforce, not what they're paid once they're there.

Representation of women

Women make up 36% of the European tech workforce in 2026, down from 38% last year – a small decline, but within the expected level of year-to-year fluctuations rather than necessarily suggesting a downwards trend.

Expert view

"Job postings are sometimes set towards a male profile without companies realising it. And as women, we're often more prone to waiting to be seen than to ask – which stops us from moving into senior roles, even when we're ready for them."

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Gender pay gap at executive level

Overall, 22% of executives are women, pointing to an issue with representation at the very top of organisations.

In terms of the pay gap, female executives earn 3-8% less on base, 21-28% less on bonus, and 18-27% less on annual equity value than male peers, with the gap widening at C-level across all three components.

Pay transparency and EUPTD readiness

Most companies have made a start on EU Pay Transparency Directive compliance – but given the Directive is now live, it's somewhat surprising that 19% have nothing in place yet, and 7% of those have no plans to.

Expert view 1/2

"We see a lot of companies still struggling with where they need to be transparent proactively, and where they just need to have an answer once an employee asks a question."

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"Comms is always the last line on the reward project plan but with EUPTD that's a real risk. If your managers don't understand what to do once it hits operations, you can very easily become non-compliant without realising it."

What are the biggest barriers for EUPTD readiness?

Over half of companies (52%) are waiting for their country's local law to be finalised before acting – more than any other barrier combined.