Made to Measure: How Opinion about Executive Performance Becomes Fact

By 15.03.15BlogSeptember 2nd, 2020No Comments

We frequently hear that well-paid executives are ‘wealth creators’ who deserve their massive pay packages. Our new report asserts that top bosses are actually not as indispensable as their pay and status indicate.

We frequently hear that well-paid executives are ‘wealth creators’ and that massive executive pay packages are necessary to attract and retain ‘top talent’. Critics rarely challenge these assertions or ask what difference handsomely-paid business leaders actually make.

Our research, conducted by leading management writer David Bolchover, involved in-depth interviews with business executives, academics and other commentators, seeking to understand questions critical to the top pay debate, including:

  • Can a handful of individuals really determine the fortune of huge companies with hundreds of thousands of employees based on multiple continents?
  • How dependent are executives on the advice and actions of their employees?
  • What about the economic context? Or the role played by governments in developing infrastructure, research projects and public services to support economic growth?
  • Even if we assume that executive leadership is the key determinant of company success, how unique are executive leadership abilities and can they not be developed or taught?

The report concludes that the contribution made by leading individuals to the fortunes of huge companies is difficult to judge. Claims that the UK’s executive leaders possess unique and irreplaceable talents – thereby justifying the huge pay packages designed to retain their services – are highly spurious, and made with little supporting evidence.

As such, the justifications made for the increasing executive pay awards that the UK has experienced in recent years should be subject to far greater scrutiny and challenge.

Download Report