ASML will link senior leaders' long-term incentives to employee feedback after its engagement index fell from 78% to 73.5%. Chief Executive Christophe Fouquet tells staff that a new Workplace Experience Index will influence remuneration, including for the company's Board of Management.
The announcement appears in an internal memo obtained by Business Insider, which also reviewed the annual survey results. More than 38,000 of ASML's roughly 44,000 employees responded to the survey. Their feedback comes as the Dutch technology company reorganises its management structure.
Six Selected Questions Will Feed the Incentive Plan
The executive team selects six questions from the survey to form the Workplace Experience Index. The new index is separate from the employee engagement measure, so the reported decline is not itself the score that will enter the incentive plan.
The selected subjects include whether employees have confidence in senior leadership and feel able to express opinions without fear of retaliation. Other questions concern whether staff understand their roles, consider their teams efficient and well organised, and believe their direct manager cares about them as an individual.
The selected questions cover confidence in senior leadership, support from direct managers and the organisation of everyday work.
Leadership selects which questions enter the index, while employees supply the answers. Their responses will influence long-term incentives rather than determine executives' total pay. The announcement brings specific assessments of leadership and everyday work into the compensation plan, rather than linking remuneration to the overall engagement score.
The Pay Link Follows Earlier Workplace Commitments
The announcement comes during a reorganisation intended to reduce management layers and bureaucracy. Fouquet describes a 'disruptive and emotional year' and says the declining engagement results reflect a period of significant change. He makes strengthening the company's culture and reinforcing its values a personal priority for the coming year.
ASML announced in January that it could cut 1,700 jobs as it reduced management layers and focused on engineering. The company subsequently said it expected fewer cuts than initially planned. Questions about role clarity and team organisation ask employees about their experience of work during that restructuring.
ASML's Code of Conduct, effective October 2024, already requires leaders to foster a physically and psychologically safe, open environment where employees can raise concerns without fear of retaliation. It applies to employees, officers and directors, including the Board of Management.
The code also commits the company to supporting employees' health and family life, including a balance between work and private life. Its non-retaliation provisions cover people raising concerns in good faith or cooperating in investigations into possible violations.
Those provisions predate the pay announcement. The new index gives selected employee assessments a route into remuneration, alongside the company's existing expectations of how leaders should behave. The code states those expectations; the survey records how employees answer questions about their workplace.
The Index's Financial Weight Remains Unspecified
Fouquet says the measure will influence senior leaders' remuneration 'in the coming years'. The report does not disclose how heavily the index will count, what scores would affect payouts or when the first assessment will take place.
The announced link therefore does not establish that lower workplace scores will automatically produce a particular pay reduction. Nor does the fall in the separate engagement index show that any executive has already lost remuneration.
Employees' answers will enter the incentive plan, but the announcement does not show how much pay could depend on them. The weighting and payout thresholds would determine how much those scores could change executives' remuneration.
