Executive Remuneration and Corporate Governance in the UK
Zhang, Weiwei (2006) Executive Remuneration and Corporate Governance in the UK. [Dissertation (University of Nottingham only)] (Unpublished)
Executive remuneration and corporate governance is a broad topic which has drawn tremendous amount of research focus. This paper aims to provide an insightful and up-to-date complement to existing research particularly with respect to short-term executive remuneration and corporate governance practices in the United Kingdom. Drawing on the data from the 2005 financial reports of fifty largest pubic listed companies operating in the UK, the paper aims firstly to provide a snapshot on the general remuneration structure, size and awarding modes. Secondly, various determinants of CEO remuneration are examined in depth. Links between CEO remuneration and firm size, performance and board structure are examined both isolatedly and aggregately. Firm size is found to remain an important factor in determining CEO base salary; however its explanatory power is discounted as to total short-term CEO pay. Performance-pay link is identified stronger than previous findings, whilst board structure is found to be of significant statistical important in explaining CEO remuneration. 9 variables as indicators of firm size, performance and board structure are adopted used to estimate the regression equation for CEO short-term remuneration. However, the fitting effectiveness of the regression equation is still subject to further examination. Light is also shed on related corporate governance issues. Focused discussion and conclusions are presented in the last part of this paper.
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