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Top executive pay and performance
Author(s) -
Main Brian G. M.
Publication year - 1991
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090120304
Subject(s) - remuneration , incentive , executive compensation , shareholder , business , accounting , function (biology) , corporate title , economics , corporate governance , finance , microeconomics , evolutionary biology , biology
Using data on 241 of Britain's largest industrial companies, the pay received by top executives in 1985 is studied as a function of corporate performance. An attempt is made to estimate the extent to which executive pay and shareholder wealth are linked. Rival explanations, relating pay to the assets, employment level and turnover of the company, are also examined. No support is found for the managerialist view that remuneration tends to be correlated with size attributes. The results do, however, suggest that, while much of the variation in executive pay remains unexplained, there is evidence of executive remuneration policy serving to effect incentive alignment between the executive's and shareholders' interests.