New research finds that companies combining strong compensation and workplace culture deliver the best long-term investment returns, The Wall Street Journal writes.
Using data from the Drucker Institute’s Management Top 250 rankings, a team of researchers at the University of Bern in Switzerland built portfolios based on firms’ employee engagement and development scores. From 2013 to 2023, those top performers averaged a 21.3% annual return—far outpacing portfolios focused only on financial strength. When culture and pay were examined separately, results showed both mattered: A balanced portfolio that reflected fair compensation and strong culture yielded a 19.3% return versus 12.1% for the S&P 500.
Firms like Autodesk and Mastercard exemplify this link, tying raises and bonuses to how employees embody company values as well as business results.
The study concludes that motivation and meaning—not just money—drive effectiveness.
