Whilst there is good evidence to suggest that CEO performance targets do influence firm performance in a manner consistent with increasing CEO payout, it is much less clear that CEOs are influencing firm performance (and therefore their pay) by changing investment. There is some evidence of such investment decisions amongst certain firms, but less clear evidence of this behaviour across the wider FTSE All-Share group. We note that the latter finding does not necessarily mean that CEO pay is correctly set in most large firms. Indeed, one reason why there is little need for CEOs to reduce investment to hit the threshold payout could be that threshold targets are too easy to hit. Still, the evidence does not suggest a systematic problem with executive pay causing underinvestment".
The Department for Business, Energy and Industrial Strategy has published a new paper, as part of its research paper series, titled "Executive pay and investment in the UK": see here (pdf). To quote directly from the executive summary: 
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