The Impact of Corporate Governance Reforms on the Remuneration of Executives in the UK

7 Pages Posted: 9 Jan 2005

See all articles by Steve Thompson

Steve Thompson

University of Leicester - Department of Economics

Abstract

Corporate governance reforms have been motivated to a considerable degree by concerns about the possible malfunctioning of the executive remuneration determination process in large firms. It is not clear, however, how effective these reforms have been in altering pay-setting procedures in the direction of aligning executive and shareholder interests. This paper reviews some initial evidence and suggests that a mixed picture emerges. It appears that reforms have been more successful in reducing executive tenure - and hence pay-offs in the event of failure - than they have been in linking rewards to performance for continuing executives. It is clear, however, that reforms have facilitated the role for institutional shareholders in approving remuneration packages.

Suggested Citation

Thompson, Steve, The Impact of Corporate Governance Reforms on the Remuneration of Executives in the UK. Available at SSRN: https://ssrn.com/abstract=645425

Steve Thompson (Contact Author)

University of Leicester - Department of Economics ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom
+44 116 252 2897 (Phone)

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