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Not Badly Paid But Paid Badly
Author(s) -
Lee Paul
Publication year - 2002
Publication title -
corporate governance: an international review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.866
H-Index - 85
eISSN - 1467-8683
pISSN - 0964-8410
DOI - 10.1111/1467-8683.00270
Subject(s) - remuneration , shareholder value , disconnection , shareholder , value (mathematics) , imperfect , accounting , business , economics , law and economics , corporate governance , finance , law , political science , linguistics , philosophy , machine learning , computer science
There seems to be an increasing disconnection between the expectations of directors and those of investors as to appropriate levels of executive remuneration. This article seeks to understand why this may be occurring. It starts from the basic principles that drive executive pay, tax, time‐scales and trust, and then explores how those factors play out in the imperfect market for talent. As US pay structures are increasingly leading the pay schemes of global companies, it asks whether those structures truly act to enhance shareholder value. It is not at all clear that this is the case, and the article points out that it is unfortunate for US tax and accounting structures to be driving pay elsewhere in the world in directions that are not conducive to shareholder value. The article proposes alternative ways forward.