Evidence from Compass-Capita-Comparison shows performance related pay can work - when measured over the long term.
Since 2009, Compass has paid Richard Cousins, its CEO, £43m and Capita paid CEO Andy Parker £15m. According to my rough sums (which ignore the impact of the numbers of shares in issue and dividends and capital distributions), Compass added value of £19bn and Capita lost £1.2bn. They started at similar size £6bn and £5bn respectively.
The FT story Richard Cousins steps down as Compass chief executive ...