If executive pay is broken, making it more complex is not the answer

 

 

There is much that is wrong with executive pay in the UK. The flaws in the current model are recognised by remuneration committees and shareholders but there is genuine willingness on all sides to move towards a better future. There are positive signs with some improved designs coming through to shareholders for approval this year. For this reason, we remain optimistic. But to make real progress will require a rebuilding of trust from all parties in order to allow a better world to emerge, combined with a willingness to think beyond the constraints of current practice.

 

We believe that a good place to start is the beginning. In order to get executive pay right - we need to understand how it can drive human behaviour. Our Psychology of incentives study, in conjunction with the London School of Economics, aims to provide a contribution to the understanding of this important issue.