Rewards3 min read21 October 2026

Setting Pay for Owners and Founders Who Run the Business

How to set and benchmark pay for owners, founders and shareholders who also run the business, and why market evidence matters for governance and tax.

In many UAE businesses, the person running the company also owns it, or owns a significant part of it. For years, what they paid themselves was a private matter: a salary that felt reasonable, topped up by dividends or drawings when the business did well.

That is changing. Investors, lenders, boards, auditors and the tax framework now all take a closer interest in how owner-managers are paid, and "it felt reasonable" is no longer a sufficient answer.

Why owner pay now needs evidence

Corporate tax. Under the UAE Corporate Tax regime, payments to connected persons, which can include owners, directors and their relatives, generally need to reflect market value to be deductible. A salary well above what the market would pay for the role can raise questions.

Governance. Where there are other shareholders, a board or an investment committee, owner pay is a related-party matter. Independent evidence makes approval straightforward and protects everyone involved.

Fundraising and exit. Investors and buyers look closely at management costs. Owner pay set well below market can overstate profitability; pay set well above it reduces value.

Succession. If the founder steps back, the business will need to hire someone into the role at market rates. Knowing that number early avoids a surprise.

Why owner pay is harder to benchmark

Owner-managers are not typical employees, and benchmarking needs to recognise that.

Challenge	How to handle it
The role is often broader than a normal CEO role	Describe what the owner actually does (strategy, sales, operations, key relationships) and match to the closest combination of market roles
Owners choose how pay is split	Benchmark fixed salary and bonus separately, and look at total cash as well
Dividends replace some salary	Exclude returns on capital; benchmark pay for the work only
Peer data is thin for very small or niche firms	Build the peer group on size and complexity, not just industry
Pay may have been set years ago	Treat current pay as the starting point for discussion, not the answer

What the market evidence usually shows

When we benchmark owner-manager roles, two patterns come up again and again. Fixed salaries vary more widely than they do for professional executives, because owners have more freedom over how they split their pay; some take a modest fixed salary and weight their reward towards variable pay or profit share. Where firms do formalise a bonus, bonus sizing tends to be more consistent than fixed salary.

The practical message is to read the market range sensibly. The extremes are usually outliers. Most comparable roles sit between the lower and upper quartiles, and that band is where a defensible answer normally lies.

A sensible process

Define the role in writing, based on what the owner actually does.
Build the peer group from companies of similar size, complexity and, where possible, sector.
Benchmark each element separately: fixed salary, bonus and total cash.
Position the role within the market range, with reasons.
Document it in a short report suitable for the board, auditors or tax advisers.
Refresh it when the business or the role changes significantly.

How Humatix can help

Humatix prepares independent pay benchmarks for owners, founders, shareholders and directors of UAE businesses, using our proprietary compensation database and verifiable public sources, with reports designed to support board approval and professional review.

Note: legal or tax advice should be sought on the legal and tax matters referred to in this article, as requirements vary by jurisdiction and change over time.

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