With all EU member states obliged to implement formal legislation on pay transparency by June 7th 2026 we asked compensation specialist Melissa Jackmin, Head of Compensation with Vestis, for her insights on what companies can learn from their US peers and how, in her experience, these changes might impact on equity compensation practices.
The EU Pay Transparency Directive aims to strengthen the principle of equal pay for equal work or ‘work of equal value’ between men and women. Companies operating within the EU will be obliged to follow a range of measures including being open with job applicants on pay ranges, not asking applicants about pay history and publishing gender pay gap details that may exist within their organization. Businesses with 100 or more full-time and part-time employees will also be required to file regular gender pay gap reports.
What’re the main differences between the two regions?
“In the US, pay transparency has developed through a fragmented mix of state and local laws, creating significant operational complexity for organizations managing multiple jurisdictions. The EU Directive, while allowing for member state implementation differences, establishes a far more unified regulatory framework. That centralized direction provides clarity at the policy level. Whether the model is patchwork or directive-based, the underlying organizational pressures are largely the same.”
Common themes and areas of focus
Job architecture
“A well-defined job architecture, with clear leveling criteria, consistent role definitions and documented expectations becomes the backbone of any pay transparency effort. Without it, organizations struggle to explain ‘work of equal value,’ defend internal equity decisions or justify range placement. Posting ranges is relatively straightforward. Explaining why two roles are leveled differently, why one individual sits higher in the range than another or how progression works across job families is much harder if the underlying structure is not coherent,” she says.
‘Work of equal value’ refers to legal entitlements where employees performing different, but equally demanding jobs, are entitled to equal pay. It is normally based on skills, effort and decision-making.
“For EU employers preparing for the Directive, strengthening job architecture would be my first and most critical recommendation,” Melissa says, noting in her experience that companies who have invested in formal job evaluation methodologies and clear career frameworks have tended to be better positioned once transparency requirements start to take effect.
Communication
“Employees care less about the existence of a pay range and more about where they sit within it and why. Managers, HR and recruiting teams must be equipped with clear talking points, training and a shared compensation philosophy,” she says.
Without that, Melissa stresses, a company’s internal messaging on transparency can break down in the face of employee questions if those delivering it aren’t sufficiently prepared or supported.
“If managers cannot confidently explain positioning, progression or performance differentiation, inconsistent messaging erodes trust faster than disclosure builds it,” she says.
Equity compensation
Equity compensation is often the least understood component of pay, even at the executive level, so can add a further layer of complexity.
“Transparency can amplify misunderstandings around grant value versus realized value, performance conditions and long-term incentive design. For that reason, equity transparency should be integrated into a broader executive and employee education strategy.”
“Companies need a clear methodology for how equity is valued for reporting purposes, how performance-based awards are explained and how long-term incentives align with business strategy.”
“When equity education is embedded into leadership communication and compensation governance, transparency reinforces understanding. When it is not, pay disclosures can magnify confusion and create unintended comparisons across roles and geographies,” she says.
Transparency is about more than compliance
“It carries real implications for board oversight, workforce planning, internal mobility and employee trust. It is not a geography-specific exercise to be managed only where mandated; it reflects how an organization defines and defends its approach to pay. Whether under the EU Directive or the current US ‘patchwork’ model, it elevates compensation from an HR process to a strategic priority. It requires defensible structures, disciplined range management and clear, consistent communication around performance and pay decisions.”
“In my experience, transparency does not create discipline, it reveals it. Organizations with clear compensation philosophy, strong job architecture and consistent governance adapt, those without that foundation are forced to build it under pressure,” she says.
Talk to us
J.P. Morgan Workplace Solutions’ equity compensation management platform for private and public companies is built to manage all your equity plan types globally. From navigating securities and labour laws to understanding tax withholding and reporting obligations, our team can provide a comprehensive global view of the regulatory landscape to help you make informed decisions.
This publication contains general information only and J.P. Morgan Workplace Solutions is not, through this article, issuing any advice, be it legal, financial, tax-related, business-related, professional or other. J.P. Morgan Workplace Solutions’ Insights is not a substitute for professional advice and should not be used as such. J.P. Morgan Workplace Solutions does not assume any liability for reliance on the information provided herein.
By visiting a third-party site, you may be entering an unsecured website that may have a different privacy policy and security practices from J.P. Morgan standards. J.P. Morgan is not responsible for, and does not control, endorse or guarantee, any aspect of any linked third-party site. J.P. Morgan accepts no direct or consequential losses arising from the use of such sites.
This publication contains general information only and J.P. Morgan Workplace Solutions is not, through this article, issuing any advice, be it legal, financial, tax-related, business-related, professional or other. J.P. Morgan Workplace Solutions’ Insights is not a substitute for professional advice and should not be used as such. J.P. Morgan Workplace Solutions does not assume any liability for reliance on the information provided herein.
