This paper investigates CEO remuneration in a sample of small and medium sized non financial Italian and UK listed companies in the period 2007-2009. It contributes on the debate about the role of remuneration as a tool to incentivize executive directors of listed companies to pursue shareholders’ interests and to reward them for the results achieved or as a tool that facilitates rentextraction. In particular, this paper analyzes the influence that company performance, CEO talent and CEO power exercise on CEO remuneration. Results suggest that company performance and CEO talent are the main determinants of CEO remuneration, in particular among UK companies. Thus, this paper finds support for optimal contracting and human capital theories, whereas there is no compelling empirical evidence that rent-extraction theory plays a significant influence on CEO remuneration. This study has important policymaking implications. It stresses the need of detailed disclosure on the criteria companies adopt to pay CEOs, in particular in Italian listed companies in which the pay for performance link is weaker than in UK listed companies
La remunerazione dell’amministratore delegato nelle imprese quotate italiane e britanniche: un’analisi empirica
GAIA, SILVIA
2012-01-01
Abstract
This paper investigates CEO remuneration in a sample of small and medium sized non financial Italian and UK listed companies in the period 2007-2009. It contributes on the debate about the role of remuneration as a tool to incentivize executive directors of listed companies to pursue shareholders’ interests and to reward them for the results achieved or as a tool that facilitates rentextraction. In particular, this paper analyzes the influence that company performance, CEO talent and CEO power exercise on CEO remuneration. Results suggest that company performance and CEO talent are the main determinants of CEO remuneration, in particular among UK companies. Thus, this paper finds support for optimal contracting and human capital theories, whereas there is no compelling empirical evidence that rent-extraction theory plays a significant influence on CEO remuneration. This study has important policymaking implications. It stresses the need of detailed disclosure on the criteria companies adopt to pay CEOs, in particular in Italian listed companies in which the pay for performance link is weaker than in UK listed companies
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
