Research Report

Executive reward: a review of the drivers and consequences

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Executive reward: a review of the drivers and consequences: summary

Published April 2014

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About this download

The publication available above to download is a summary of a review of academic research on executive reward carried out on behalf of the CIPD by the London School of Economics and Political Science. The full review is available below to download .

The purpose of the report is to review recent academic studies into top pay between 2007 and 2013, to highlight the findings and consider the implications for practice. The review focuses on two main areas: assessing the studies that attempt to explain what has been driving executive income upwards, and evaluating the studies that explore what, if any, have been the consequences of this increase in pay.

The report is written for and aimed at reward and HR professionals working in the area of executive remuneration, as well as those who would like to know more about this topic. While most research on executive pay has been, and continues to be, dominated by US data, our report includes UK and European evidence where possible.The report has implications for reward practice as well as public policy.

The main viewpoints are the standard economic perspective, which focuses on economic efficiency, and the managerial-power perspective, which hypothesises that executives exercise power in such a way that they are able to influence their own pay levels. There is also a behavioural perspective, which daws on psychological theories about motivation and risk.

"There is an emerging consensus that the clarity that economic models
can provide in revealing underlying structure should be balanced with a more
subtle behavioural perspective if they are not to become dangerously simplistic."

Content of the report
  • Foreword
  • Introduction
  • What determines executive reward
  • Consequences of executive reward
  • Group analysis
  • Conclusion
  • References


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Executive reward: a review of the drivers and consequences: full report
Published April 2014

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