How Vietnamese Companies Can Compete When MNCs Pay Executives 43% More?
Nov 7, 2025
Last updated on Nov 7, 2025
Can high executive compensation buy the loyalty of senior leaders? Data shows the 43% pay gap with multinational corporations is real, but it's only the tip of the iceberg. The real battle isn't about "how much to pay," but about the challenge of balancing expectations of authority, organizational culture, and the company's cash flow realities.
Key Takeaways
- The 43% gap in executive compensation for leaders at Vietnamese companies versus MNCs is just the tip of the iceberg; most C-level dissatisfaction stems from a lack of autonomy and strategic transparency.
- The real battle isn’t about “how much to pay.” It’s about the ability to build an executive compensation structure that balances expectations of authority, a culture of power-sharing, and the company’s cash flow realities at each stage of its development.
- Businesses must build a comprehensive value proposition by designing executive compensation plans that leverage their advantages in decision-making speed, use long-term incentives like ESOPs, and provide a transparent roadmap for empowerment, rather than competing solely on base salary.
The 2025 battle over c suite compensation packages is not a “right vs. wrong” debate; it’s a practical problem with many variables that each business must consider. The Talentnet-Mercer Total Remuneration Survey won’t offer a single formula for talent retention. Instead, it analyzes the variables and strategic trade-offs every leader must consider to build a competitive value proposition, one that fits their company’s specific situation and stage of development.
Compensation is only the tip of the iceberg
When discussing the war for senior talent, most Vietnamese businesses immediately think of increasing base salary. However, the reality is far more complex.
Data from the 2025 Talentnet-Mercer Total Remuneration Report shows that the C-suite executive salary at Vietnamese companies is up to 43% lower than at multinational corporations. This figure creates immense competitive pressure, but it doesn’t tell the whole story.
More importantly, a majority of senior leaders remain dissatisfied with their current executive compensation plans. The primary reason is not that the absolute salary is too low, but that pay policies are not accompanied by autonomy, transparency in strategic direction, or a clear personal development path.
Senior leaders care about three core factors: real decision-making authority, cultural alignment, and the ability to execute strategy. Multinational companies have an advantage in comprehensive benefits systems and professional autonomy. Vietnamese businesses, on the other hand, have the advantage of speed and flexibility in decision-making, adapting quickly to the market. These are the very factors many leaders value highly when considering career opportunities, especially those who have experienced rigid, multi-layered approval environments.
Download the full report now to build your compensation strategy on real data!
The challenge: Balancing expectations with business reality
How can Vietnamese businesses optimize their existing resources to build an attractive value proposition that shapes their executive hiring strategy?
1. The challenge of cash flow and development stage
Many Vietnamese businesses are SMEs or private companies, making executive compensation plans for private companies a unique challenge with limited financial headroom and salary budgets often concentrated on key personnel. Paying leaders at MNC standards becomes a direct trade-off against budgets for technology investment, R&D, or team expansion.
A company-wide salary increase roadmap can be easily disrupted without careful cash flow management, creating risks for financial sustainability. This explains why the average salary increase at many Vietnamese businesses is often conservative, making many employees feel that compensation policies are being tightened.
However, data shows that while general salary budgets are limited, companies are willing to pay 7% above the market rate to attract senior leaders capable of restructuring or driving transformation. This figure reflects a difficult choice: businesses are forced to choose between maintaining internal equity and making strategic investments in roles that can create breakthrough growth.
Expert compensation structuring advisory helps businesses balance their capital investment across multiple areas; they cannot focus perfectly on benefits while ignoring other growth factors. Each organization must analyze its own balance point based on its industry, development stage, and growth strategy relative to competitors, rather than expecting a one-size-fits-all solution.
2. The unique culture of power-sharing
In many family-owned or founder-led businesses, the final decision-making power often rests with the founding shareholders, making it difficult for external senior leaders to implement new ideas. This is a common governance characteristic in Vietnam.
The challenge lies in how to make this mechanism transparent from the beginning and build a clear roadmap for sharing and delegating power to new leaders through initial agreements and periodic review mechanisms.
Transparency of authority and a clear path to earning it are top priorities for senior leaders. If an organization lacks a clear evaluation system or power-sharing mechanism, it will be difficult to retain them long-term, no matter how attractive the compensation is.
3. The “culture problems”
Data shows that 62% of senior leaders leave their jobs due to cultural issues. This figure is often interpreted as a sign of a “toxic” organization, but the reality is far more complex.
In any business, cultural shortcomings are often the consequence of difficult strategic choices. To innovate quickly, a company must accept high work pressure, which creates a sense of instability for staff. To focus resources on key areas, the company must postpone investment in other processes, leading to a feeling of being unsupported. To maintain control during restructuring, the founder must keep final decision-making power, which makes new leaders feel their authority is limited.
From the CEO’s perspective, choices like controlling authority during restructuring or focusing resources on strategic areas are difficult but necessary steps to protect the company’s stability and survival in a volatile market with limited resources. The CEO must prioritize solutions that maximize the common good, even if this creates a less-than-ideal experience for some parts of the organization.
From the perspective of a new senior leader—who was not part of forming the initial strategy—these choices are easily viewed through a personal lens as “lack of empowerment,” “non-transparent culture,” or a “problematic environment.” When both sides stop at applying labels like “bad” or “toxic,” they miss the opportunity to understand the real business context and the specific strategic pressures behind these decisions.
Instead of reacting emotionally or comparing against an ideal model, the CEO and senior leaders need to build a mechanism for dialogue to share common goals and deeply understand the circumstances behind each difficult decision. Understanding the meaning and impact of turnover in business helps the CEO recognize early warning signs of instability and intervene in time before losing key talent.
A strategy of compensation & empowerment to attract senior leaders
Instead of focusing only on base salary, businesses need to build comprehensive c suite compensation packages, leveraging their unique advantages to create a distinct appeal. The three pillars of this strategy include:
1. Leverage the unique advantages of Vietnamese businesses
CEOs should proactively build streamlined decision-making processes with clear delegation to leverage speed and flexibility—two factors where MNCs often can’t compete in the Vietnamese market.
Many large private enterprises in Vietnam grow quickly thanks to their ability to make strategic decisions in just one or two days, without going through multiple layers of approval. This allows senior leaders to experiment and pivot quickly with a large scope of influence—an experience that is hard to come by at a multinational corporation.
To leverage this advantage sustainably, CEOs need to conduct periodic leadership capability assessments, using specific metrics to identify their own strengths and weaknesses as well as those of their team. This allows them to focus on training and collaboration rather than just chasing market averages.
2. Build long-term incentive plans that are real, not just theoretical
Instead of stopping at KPIs or year-end bonuses, CEOs should implement real long-term performance incentives: granting equity based on financial targets or specific project milestones over three to five years, not just promises or symbolic percentages.
Select senior leaders to become strategic shareholders who participate in long-term, impactful decisions rather than just executing orders.
Set bonus targets tied to continuous growth in total assets or EBITDA over three to five years, not just the short term. This motivates senior leaders to stay and align with the owner’s long-term goals.
Building transparent employee benefits policies and clear long-term incentive mechanisms helps build trust from day one.
Build a written empowerment roadmap, clearly announcing review milestones after each quarter or transformation phase, and avoid verbal promises.
Be transparent about finances and responsibility handovers, and allow leaders to proactively suggest changes if KPIs don’t match reality.
The CEO should create regular internal dialogue mechanisms, like monthly meetings or town halls, to clearly present the strategic challenges, obstacles, and the “map” of authority at each stage of development. This helps new leaders not only execute but also participate in shaping the overall goals, reducing any feeling of being excluded from the decision-making circle.
Where does your company stand in this battle? Download the full report for detailed comparative data on salary structures, bonuses, and the non-financial reward policies that your industry peers are using.
The battle for executive compensation is ultimately an optimization problem that demands a balance between cost, motivation, culture, and strategy. There is no single right answer; each business must find its own equilibrium based on its financial reality, development stage, and strategic direction.
The Talentnet-Mercer benefits survey report will provide businesses with detailed data on the salary and total income gaps between Vietnamese companies and MNCs by industry and level. It includes a deep analysis of the long-term bonus models that top companies are using, along with insights into the non-financial expectations of senior leaders, all to help you build a comprehensive value proposition.
Don’t let the compensation battle become a meaningless race to burn cash.
Arm yourself with data to build a sustainable leadership retention strategy, especially as the labor market shifts with a new wave of hiring optimism and a hidden war for technical talent.
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