Heads I win, tails you lose? A career analysis of executive pay and corporate performance

Ian Gregory-Smith, Brian Main

Research output: Contribution to journalArticlepeer-review


The paper draws on a novel career perspective to examine managerial theories of organisational control in the context of executive pay. Detailed career histories of boardroom executives in all FTSE350 companies between 1995 and 2008 are utilised. The paper highlights the failure of existing arrangements to adjust pay outcomes where career performance is poor. Yet the leading theoretical reasons for this disconnect, namely managerial power and neo-institutionalism, are not consistent with the data here. Rather, the paper identifies a settling-up process, whereby pay is adjusted in the light of both past pay and performance. This is consistent with agency theory operating within an institutional context. From a policy perspective, the case is made for adopting a cumulative or career-oriented approach to evaluating executive performance through the use of truly long term incentives in the form of ‘Career Shares’.
Original languageEnglish
Pages (from-to)1373-1398
JournalCambridge Journal of Economics
Issue number5
Early online date10 Nov 2014
Publication statusPublished - Sep 2015


  • Corporate control
  • Career shares
  • Executive pay


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