Say on Pay Design, Executive Pay, and Board Dependence

Say on Pay Design , Executive Pay , and Board Dependence ∗ July 2011 , this version October 2011

Motivated by important international differences in the design of ”say on pay” (SoP), this paper studies how its enforceability and its timing affects compensation decisions of the board of directors (BoD) and the level of board dependence. The analysis suggests that SoP design can have significant economic consequences that should be considered by regulatory authorities. In the context of a th...

Board Independence, Executive Pay Structures, and Pay Disclosure: Evidence from Europe

Using a broad sample of the largest European companies, I examine whether the two governance mechanisms, namely (i) independent monitoring by a board of directors and (ii) grants and disclosures of incentive-based executive pay, are substitutes for one another. I find that companies with proportionately more executives on their boards of directors grant greater incentive-based pay to their exec...

Board Structure and Executive Pay: Evidence from the UK

We examine the impact of board structure on executive pay for 1,880 UK public firms over 1983-2002, using panel data analysis. Firstly, the proportion of non-executive directors tends to decrease the rate of increase in executive pay whilst board size tends to increase it. Secondly, the proportion of non-executives strengthens the relation between the rate of increase in executive pay and chang...

Before and After Say on Pay

Merger Activity and Executive Pay

This paper examines the impact of mergers and acquisitions on the remuneration of the CEOs in a large unbalanced panel of UK firms, over the period 1981-1996. We find significant and substantial executive pay increases in excess of those generated by the growth in firm size consequent upon the merger. This is consistent with the view that mergers reveal information about the quality of manageme...