Executive remuneration models ‘do not describe how pay is actually set’
Researchers have interviewed non-executive directors and investors to highlight the hidden factors involved in CEO pay decisions.
Image: Marvent/Shutterstock
New research suggests there is more going on under the surface of chief executive pay deals than is commonly understood. One of the most significant findings is that CEOs are less concerned by the overall size of their pay package than whether they receive a fair reward that supports their reputation.
Other revelantions are that non-executives appear to prioritise finding the right leader over “designing” a motivational remuneration deal while pay levels are driven mostly by the perception of a chief executive’s abilities. Meanwhile, investors overwhelmingly believe CEOs make better decisions if incentives are more long term.
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