Managerial Pay and Company Performance: UK Electrical and Office Equipment Goods Industry Available to Purchase

It appears that the role of money as a motivator in work tasks has increased substantially during the past decade. This applies particularly to managerial and executive grades. First, why this might be the case is discussed. Second, the literature on the early research into the pay of the chief executive is reviewed, since a major point of consideration was the relationship between CEOs′ pay and firms′ performance. Third, the evidence on profit sharing and company performance is examined, as it appears that this form of linkage has increased in the last decade,particularly for managerial and executive grades. Fourth, a model for testing the relationship between managerial remuneration and the performance of the firm is presented. This model is then applied to internal and external measures of performance for a sample of 147 firms in the UK electrical and office equipment industry for the year 1987, and conclusions are drawn.