Making executive pay work

The psychology of incentives

A global study into the impact of pay and incentives on senior executives.

This research was carried out by PwC1 in conjunction with the London School of Economics and Political Science. 1,106 participants took part in the study, 81% of whom were male and 19% female. 187 worked in the financial sector (22% of whom were female).

The executives had a wide range of senior roles in various sectors and were categorised into three earnings' bands of $350,000 and under (66% of participants), between $350,000 and $725,000 (24% of participants), and over $725,000 (10% of participants).

Key findings:

  • Executive are risk-averse
  • Complexity and ambiguity destroy value
  • The longer you have to wait the less it's worth
  • It's all relative - fairness is fundamental
  • People don't just work for money
  • The key motivation of a long-term incentive plan is recognition

About our Study