Almost half of UK employers are reviewing their executive remuneration packages because of the economic downturn.

According to Watson Wyatt, companies are concerned their performance incentives will not provide the right motivation for execs during a sustained period of downturn.

The survey found that base salaries are likely to rise in 2009, annual bonuses will be changed to reflect a ‘new economic reality' and long-term incentives will be managed more conservatively.

John Pymm, European head of executive reward at Watson Wyatt, said: "There is no sign of a rush to make significant changes to executive packages or to override existing performance tests in short-term and long-term incentives.

"Nonetheless there is a desire to maintain pay packages that will reward executives for achievement of stretching targets in a difficult environment, and to hold out the potential for rewards coming through for strong performers in the upturn."