Big executive pay not for performance, but for underperformance.

We’d probably expect to see a pretty tenuous relationship between companies’ share price performances and the rewards of those at the top of them. We’d also probably expect to see a one-way ratchet, where pay goes up in good times for a company, but rarely falls in bad times. We probably expect to see executives quite often rewarded for luck, rather than skill.

And guess what? Those things are precisely what the latest data does suggest. The financial data firm MSCI has taken a sample of 428 large listed American companies and examined their performance between 2006 and 2015. And MSCI has found that shareholder returns at those firms whose boss earned below the median of their sector outperformed those firms whose boss earned above the median.

It turns out that companies don’t do better when bosses have very high pay – but this will have to change after Brexit