Yes, executives and senior managers can be covered by the EU Pay Transparency Directive where they have an employment contract or employment relationship recognised under the applicable Member State framework. Recital 18 expressly identifies workers in management positions among the groups intended to fall within the Directive. A senior title or individually negotiated compensation package does not by itself create an exemption. Employers should assess legal worker status first, then determine how pay-information rights, equal-pay analysis and Article 9 reporting apply under national implementation.
Jurisdiction: European Union
Management Positions Are Expressly Mentioned in Recital 18
Recital 18 of Directive (EU) 2023/970 expressly refers to workers in management positions among the groups that should fall within the Directive where they have the required employment contract or employment relationship. Article 2 provides the core legal test by applying the Directive to workers whose employment contract or employment relationship is recognised under national law, collective agreements or practice, taking account of Court of Justice case-law. The practical point is simple: an employer should not exclude executives or senior managers merely because of title, grade, compensation level or organisational status.
A Senior Title Does Not Decide Worker Status
Chief executive, director, vice-president and head-of-function titles can describe very different legal relationships. Some individuals may clearly be employees, while others may hold corporate offices or governance roles that require separate analysis under national law. The Directive does not create a universal rule that everyone with an executive title is included or excluded. Employers should determine whether the individual has the relevant employment contract or employment relationship and should document that conclusion. The legal status of the person matters more than the prestige or seniority of the role.
Covered Senior Managers Can Have Pay-Information Rights
Where a senior manager is a covered worker, Article 7 worker-information rights can be relevant. The employer should therefore avoid designing information-request procedures that automatically stop at a particular grade or leadership level. The practical comparison group may require careful job-value analysis because senior roles can differ substantially in responsibility, decision-making authority, business impact and required expertise. That complexity does not remove the right. It means the employer needs a defensible method for identifying categories of workers performing the same work or work of equal value.
Executive Pay Differences Still Need Objective Explanations
Senior compensation packages often contain salary, bonus, equity-linked incentives, allowances and other variable components. Large differences can be legitimate where they reflect objective and gender-neutral factors such as responsibility, experience, performance, market conditions or the value of the role. The Directive does not require identical pay for different work. It strengthens the framework for examining whether pay differences between women and men doing equal work or work of equal value can be objectively justified. Employers should therefore maintain clear criteria for senior pay decisions instead of relying only on individual negotiation history.
Individually Negotiated Packages Are Not Automatically Outside Transparency
An executive may have a bespoke contract negotiated directly with the board or remuneration committee. That can make compensation governance different from ordinary salary-band administration, but it does not by itself remove the relationship from the Directive. Employers should understand which elements of the package are pay, which objective criteria support them and how comparable roles are evaluated. Historical salary, negotiation leverage or inconsistent discretionary practices can create risk if they produce unexplained differences. A documented framework for executive compensation is therefore useful even where each package contains individual terms.
Senior Managers Can Matter to Article 9 Reporting
If a senior manager is a covered worker, the employer should determine how that person is treated in the Article 9 reporting population and in categories of workers under the applicable national implementation. Management roles should not be removed from reporting data simply because they are highly paid or numerically small. Their inclusion can affect pay-gap metrics, quartile distributions and category-level analysis. Where national rules or the legal status of a particular executive produce a different result, the employer should document the basis for that treatment rather than applying a blanket exclusion to the entire leadership population.
Create a Separate Senior-Leadership Scope Record Where Needed
Employers with complex executive structures can benefit from a short scope record for senior leadership. The record can identify each role, employing entity, jurisdiction, employment status, compensation governance process, Article 9 treatment and relevant worker category. This helps legal, HR and remuneration teams avoid contradictory assumptions. It also provides evidence for why a person was included or excluded. The aim is not to create a special exemption framework for executives, but to make sure senior roles are analysed with the same legal discipline applied to the rest of the workforce.
Frequently Asked Questions
Are senior managers automatically exempt from the Pay Transparency Directive?
No. Recital 18 expressly refers to workers in management positions where the required employment relationship exists.
Can executive pay be different from other workers' pay?
Yes. Differences can be legitimate where they are supported by objective, gender-neutral criteria such as responsibility, experience, performance or job value.
Should executives be included in Article 9 reporting?
Employers should assess covered executives under the applicable national implementation rather than excluding management roles automatically.
Related Guides
Official Sources
Requirements and practices differ by jurisdiction and organisation. Check current local law, official guidance and professional advice for a specific situation.