Summer Olympics: Cash For Gold by Emolument.com
With the 2016 Summer Olympic Games upon us, we wanted to know if there was a link between the number of medals won and the level of pay in those countries
Emolument.com has analysed 6,731 salaries of IT professionals in 21 countries and correlated them with the number of medals won in the 2012 games. The salaries were used as an indicator of a country’s economic prosperity. We also compared the monetary reward per gold medal with the salaries of 2,974 front-office VPs in Investment Banking. There are strong correlations between medals won and salaries, even though other historical factors and incentivising strategies add a layer of complexity to the analysis.
Graph 1 & Table 1. Correlation between the 2012 Summer Games rankings [1] and total median compensation (salary + bonus) in technology firms
The Star-Spangled Banner. The USA, one of the highest income countries in IT, won the most medals in the 2012 Olympics. However, while the yearly income in Switzerland is 33% larger than the United States, they came in 33rd in regards to the number of medals won. For the Winter Olympics though, the Swiss ranked 7th. Clearly a matter of topology in this case!
India lags behind. Population size is considered a statistically significant factor when it comes to reaping good results at the Olympics [2]. India -the second most populous country of the world with its 1.25 billion inhabitants [3] – goes against this trend however. Looking at India’s salary data, it offers the lowest level of pay which could go some way to explaining its low medal count.
Russia: serious state funding? Russia may be on the lower end of the median compensation offered but outperforms most other countries in its performance at the Olympics. The Russian state has a vested interest in doing well in the Olympics, a key indicator of national greatness in which Russians take great pride!
Graph 2 & Table 2. All figures based on total compensation (salary + bonus)
Bring home the gold: what is it worth? Countries which only rarely win tend to offer the substantial rewards to gold medal winners as incentive: in 2012, Singapore offered the equivalent of three investment banking VPs’ earnings (£500,000) to gold medalists [4], which however did not yield any results. The US though, consistently in the top three, offered £16,000 per gold medal which is 38 times less than what a VP in banking makes per year.
Monetary incentives have little effect on an athlete’s performance which is usually tied to the budgets allocated to sports facilities by each country.
Alice Leguay, Co-Founder & COO at Emolument.com said: ‘The prestige attached to winning an Olympic medal both for individual athletes and national perception is difficult to rival when it comes to sporting achievement. Athletes should not be concerned about prize money as they are likely to negotiate lucrative private sponsorship deals on the back of their success.’
[1] https://en.wikipedia.org/wiki/2012_Summer_Olympics_medal_table [2] http://www.pwc.fr/fr/assets/files/pdf/2012/06/pwc_etude_medailles_olympiques_2012-06-14.pdf [3] https://en.wikipedia.org/wiki/Demographics_of_India [4] http://www.telegraph.co.uk/sport/olympics/9194402/London-Olympics-2012-no-cash-incentives-for-Great-Britains-medallists.html
