Evidence key in executive pay debate

There is so much data on executive pay available that it is possible to find a statistic ‘that proves almost anything’, according to a blog by Tom Gosling, partner at PwC. However, much of the executive pay analysis making the headlines is ‘simply not rigorous and would not stand up to scrutiny in any peer-reviewed academic journal’, he adds.

Countless studies are based on selective interpretations of the data and weak methodologies and confirmation bias (quoting evidence that supports a particular view and filtering out anything that undermines it) is endemic, Gosling claims. In the blog, he sets out a number of executive pay ‘myths’, including that there is no link between executive pay and performance, and that incentives do not work.

The blog is part of PwC’s Demystifying Executive Pay insights: click here