Benefits June 17, 2002

Exec Comp Not Performance Based

June 17, 2002 (PLANSPONSOR.com) - Executive compensation appears to be unconnected to employees' personal performances or leadership competencies, a new survey by Buck Consultants finds.
Reported by

The survey, titled “People, Competencies and Performance,” revealed that while 68% of participants described their companies as at least moderately performance-driven, 90% admitted that when it comes to pay increases, they make little attempt to differentiate between mediocre and top performers.

In addition, not a single respondent reported giving a zero increase to under-performing executives. Meanwhile, 13% said there was a direct link between performance on critical issues and executive compensation.

Also,

  • 64% of respondents said that company or unit financial performance continues to drive executive pay,
  • while 10% said leadership competencies drive pay, and
  • 23% said that individual executive performance was a key factor in pay decisions

The survey sample comprised 70 executives.

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