ASML CEO Christophe Fouquet is linking his own salary to employee morale.

According to a memo sent to employees, first reported by Business Insider, Fouquet stated that this Dutch chip equipment manufacturer will incorporate a new “Workplace Experience Index” into the long-term incentive plans for senior management, which includes himself and other members of the ASML management committee. Fouquet wrote: “In the coming years, this will directly affect the compensation of senior leadership, including the management committee.”

This change stems from the annual employee survey conducted by ASML. The survey indicates that the company's engagement index has dropped from 78% in 2025 to 73.5% this year. More than 38,000 out of approximately 44,000 employees at ASML participated in the survey. Fouquet acknowledges that this decline occurred after the company went through a "turbulent and emotional year."

The new index consists of six survey questions, covering whether employees trust senior management to make correct decisions, whether they feel safe in expressing their opinions, whether they understand their responsibilities, whether they believe the team operates effectively, and whether they feel that their direct manager cares about them, among other things. The memorandum does not specify what proportion of weight this index will have in the compensation of senior executives, nor does it indicate when it will be applied for the first time.

It is not common to link executive compensation to employee morale, but it is not unheard of either; Business Insider points out that both IBM and Aviva have previously included employee dedication as part of their executive compensation targets.

A tumultuous year for the company that relies on the AI craze

ASML is the world's only supplier of extreme ultraviolet lithography machines, which are crucial for the production of the most advanced semiconductors. Driven by technology giants investing tens of billions of dollars in the infrastructure of AI, the company has reaped substantial benefits and recorded a record net profit of 9.6 billion euros in 2025.

Nevertheless, on the same day in January when the aforementioned financial results were announced, ASML announced plans to cut approximately 1,700 jobs, which accounts for about 3.8% of the total workforce, mainly involving technical positions and management roles within the IT organizations in the Netherlands and the United States. The company stated that the goal is to reduce bureaucracy and allow engineers to focus on innovation.

Dutch unions strongly oppose this. According to NL Times, the CNV union described this plan as "completely unexpected." ASML eventually reached a social plan with four unions – FNV, CNV, De Unie, and VHP2 – which was agreed upon in principle in May and finalized in June. The agreement prohibits forced layoffs until May 1, 2027, and relies more on internal reassignments; the company says this may save hundreds of jobs.

In the memorandum, Fouquet linked the decline in professionalism to this turmoil, stating that the reason for linking the leadership's salaries to employees' experience with the company was precisely the chaos caused by the reorganization.

Why does ASML link executive compensation to employee satisfaction?

A large portion of companies in the tech industry are developing in the opposite direction, accepting long working hours and round after round of layoffs. Some startups have even adopted the "996" work schedule, which is borrowed from China's tech industry, requiring employees to work from 9 a.m. to 9 p.m. six days a week.

Layoffs are also on the rise. According to data from job placement companies Challenger, Gray, and Christmas, American employers announced layoffs of about 1.2 million people in 2025, the highest number since 2020 and roughly on par with 2008. The tech industry led the private sector, with 154,445 layoffs announced. Overall, layoffs seemed to ease in 2026, dropping by 39% to 573,195 by September, but the trend in the tech industry was the opposite: a report from Challenger in September showed that the industry has laid off 165,925 people so far this year, a 54% increase, accounting for 29% of all layoffs.

Layoffs continue this month. Netflix indicates that approximately 1,000 people will be laid off, which is about 6% of the total workforce. Microsoft is offering voluntary severance packages to around 60,000 employees, which is roughly a quarter of its total staff. Skydance, formed after Paramount acquired Warner Bros. Discovery, has also warned its employees that layoffs are imminent.

However, Erasmus Happiness Economics Research Organization, the deputy scientific director, believes that ASML faces different trade-offs. He studies employee dedication and CEO compensation, and thinks that due to the high level of specialization among employees, ASML has more reason than most tech giants to prioritize employee satisfaction.

Hendriks to Fortune says: "The reason ASML does this is that attracting and retaining talent is of utmost importance to them. They invest a lot in their well-being because these people are very professional, and the cost of replacing them is very high."

CEO Does salary affect employees?

As ASML links executive salaries to employee satisfaction, the globally soaring CEO salaries are raising questions about fairness.

A study by the International Trade Union Confederation and Oxfam shows that the top 1,500 highest-paid CEO globally experienced an average real salary increase of 11% in 2025, while the increase for ordinary workers was only 0.5%. Fortune previously reported that these CEO had an average annual income of $8.4 million last year, which is higher than the $5.5 million adjusted for inflation in 2019.

Elon Musk has always been at the center of this debate. With the record-breaking IPO completed in June, he became the world's first trillionaire, and since then his wealth has remained around that level. In November 2025, Tesla's shareholders approved a compensation plan that allows him to receive up to $1 trillion in stock if he meets a series of performance targets. AFL-CIO valued Musk's compensation from Tesla for 2025 at $158.3 billion, which is approximately 2.5 million times the median income of Tesla employees, which is $57,243.

Hendriks indicates that, overall, there is no direct correlation between employee dedication and CEO compensation. However, he believes that when the media focuses on extreme compensation packages like those of Musk, employee dedication may decline sharply.

A professor at the University of Oklahoma who studies organizational behavior, Trevor Watkins, stated that such situations can severely affect employee performance.

Watkins to Fortune says: "When fairness is lacking, the expected outcome is anger and resentment."

These emotions are not beneficial to the performance of employees who are important to the organization. The organization hopes for engaged and efficient employees, while these feelings of unfairness and resentment can cause disruption.