Authors Arden Dalik and Peter Landers argue corporate boards can learn a thing or two from soccer and how FIFA manages performance pay. Rodri of Spain lifts the FIFA World Cup Winner's Trophy after the team's victory following the FIFA World Cup 2026 Final match between Spain and Argentina at New York New Jersey Stadium on July 19, 2026, in East Rutherford, N.J. Photo by Buda Mendes /Getty Images

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Every four years, the World Cup reminds us of something surprisingly simple: Performance matters; not effort; not intentions; but results, and, we’ll argue — appropriate behaviour.

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When Spain lifted the World Cup trophy last month, nobody wondered whether the players deserved performance bonuses. They had earned them by winning a championship.

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The same principle is supposed to govern executive compensation at public companies and yet somehow over the past couple of decades executive pay at some companies has become increasingly disconnected from the straightforward idea of rewarding genuine performance.

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Perhaps boards should consider how incentives work during the World Cup. Players receive a base salary from their clubs throughout the year, but representing their country is different.

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FIFA distributes prize money to national federations based almost entirely on tournament success. Teams that advance further receive materially larger payouts than those eliminated early. Most federations then share those “performance bonuses” with the players and coaching staffs.

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The incentive system is simple. Advancing to the next round, winning the next game and bringing home the trophy leads to bigger rewards. Everyone knows the objectives before the tournament begins and every player understands how success will be measured. Fans can easily determine whether these goals have been achieved.

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In comparison, a typical public company CEO in Alberta receives a base salary, annual bonus, stock options, performance share units and/or restricted share units, with some receiving a pension and other taxable benefits.

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In a well-designed annual bonus plan, a simple set of three to five performance measures should be used, but is often replaced by a laundry list of measures.

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Instead of using actual results, benchmarks are adjusted to reflect extraordinary or one-time non-recurring events. Individual performance measures are included as well, which are difficult to quantify and require judgment by the board of directors.

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In certain situations, success in non-financial areas can be rewarded at the expense of profitability and shareholder returns. This was the case many years ago at CP Rail, which led to a proxy battle and the overhaul of its board and management. The shakeup has led to tremendous success with a total shareholder return of over 1,000 per cent since January 2012 when management began focusing more on measurable metrics like operating ratio.

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Former Canadian National CEO Hunter Harrison during a meeting of CP Rail shareholders in Toronto on February 6, 2012. U.S. hedge fund Pershing Square Capital Management, a CP Rail shareholder, launched a proxy fight to replace CP Rail CEO Fred Green with Harrison. Darren Calabrese/Postmedia file

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To be clear, running a corporation is far more complicated than winning a soccer game (in most people’s eyes). A player cannot control everything. Injuries and weather can affect results. Similarly, a CEO cannot control oil prices, interest rates, tariffs, geopolitical instability or pandemics. Therefore, their compensation should not depend entirely upon short-term results like share price movement.