The remuneration of independent directors in the UK and Italy: An empirical analysis based on agency theory

Chris Mallin, Andrea Melis and Silvia Gaia

International Business Review, 2015, vol. 24, issue 2, 175-186

Abstract: This study investigates independent non-executive directors’ remuneration from an agency theory perspective, taking into account both optimal contracting and managerial power perspectives. Using a sample of 1733 independent non-executive directors’ year observations in Italian and UK non-financial firms listed in the period 2007–2009, we find that in both countries independent non-executive directors’ remuneration is mainly based on the observable effort they exert and their responsibilities. Our findings also show that independent non-executive directors who do not fulfil formal independence criteria, as stated in the respective national corporate governance codes, seem to be paid more than those who do fulfil such criteria, particularly in the UK.

Keywords: Agency theory; Corporate governance; Independent non-executive director; Italy; Remuneration; UK (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:24:y:2015:i:2:p:175-186

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DOI: 10.1016/j.ibusrev.2014.07.006

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