HR and future of work · Industry brief

In 2025, middle-market companies are restructuring executive compensation strategies in response to economic uncertainty, with six key trends emerging. Companies are shifting from cash bonuses to deferred compensation, phantom equity, and profit-sharing arrangements to preserve liquidity while complying with Internal Revenue Code Section 409A. Performance metrics are being realigned due to tariff impacts and supply chain disruptions, requiring formal documentation and transparent communication to avoid disputes. Executives are negotiating increased downside protection including minimum bonuses and severance enhancements, though companies must guard against Section 280G golden parachute violations. Multi-year retention programs with cliff-vesting structures and restrictive covenants are gaining traction, while operational resilience metrics are replacing traditional growth measures in incentive plans. Board scrutiny of executive pay is intensifying, driving adoption of more formal governance protocols around compensation benchmarking and committee oversight, with companies advised to formalize compensation governance, review severance triggers and change-of-control provisions, and align compensation design with business continuity and succession planning.

A 2026 regulatory update on cross-border M&A in the UAE shows foreign buyers must now navigate heightened scrutiny across beneficial-ownership disclosure, foreign-investment approvals, sanctions screening, export controls, and banking compliance. The regulatory framework differs materially by jurisdiction—mainland entities face the longest timelines and potentially require Cabinet-level consent for strategic sectors, while free zones and financial free zones (ADGM/DIFC) offer faster, more predictable processes but remain subject to UAE-wide sanctions rules. The Ministry of Economy, UAE Cabinet, Securities and Commodities Authority, and sectoral regulators (energy, telecoms, financial services, defence) each carry distinct filing and approval requirements, with missed consents representing one of the hardest defects to remedy post-signing. Key compliance risks include undisclosed ultimate beneficial owners (UBOs) that can surface post-completion in share deals, sanctions hits on counterparties or controllers that freeze payments silently, and banking delays despite secured regulatory approvals. The source material cites the UAE Government portal, Ministry of Economy, UAE Central Bank, Securities and Commodities Authority, ADGM, DIFC, and UAE Cabinet as primary regulators, and recommends treating approvals, UBO verification, screening, and banking clearance as parallel workstreams locked into conditions precedent and supported by representations, warranties, and post-closing indemnities.