Research and analysis

Executive pay and investment in the UK

A research paper on CEO performance targets and pay incentives from 2013 to 2019.

• From: Department for Business and Trade and Department for Business, Energy & Industrial Strategy
• Published: 4 June 2021

Documents

Executive pay and investment in the UK

Ref: BEIS Research Paper Number: 2021/007

PDF, 1.98 MB, 208 pages

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Details

This study explores the relationships between CEO performance targets, the pay incentives associated with those targets, and firm investment for companies listed on the FTSE All-Share index (as of April 2020) from 2013 to 2019. The study has 3 aims:

• explore the prevalence of different performance targets in UK executive pay contracts, with a view to better understanding the use of different target types and whether they are calibrated effectively to incentivise target achievement
• examine the evidence for whether CEOs influence firm investment decisions to improve performance against specific targets in their pay contracts
• examine the evidence for whether there is a systematic relationship between the presence and size of specific performance targets and firm investment

This report has been prepared by PwC for the Department for Business, Energy & Industrial Strategy.

Published 4 June 2021