Abstract
The topic of executive pay-performance sensitivity has resulted in mixed research findings. Literature
related to executive remuneration constructs, company performance measures and the underlying theories
is critically reviewed in this article. The literature is compared to research findings within the South African
context pre, during and post the Global Financial Crisis of 2008. The researcher found similar results in the
South African context compared to research in other countries and industries. The research challenges the
notion that there is one dominant theory driving CEO compensation. The principal-agent theory, supported
by the optimal contract theory, are foremost during periods of strong economic performance, while the
influence of managerial power and other behavioural theories appear to prevail during periods of weak
economic performance. This article proposes some critical considerations in order to manage this tension.