CEO Age and Top Executive Pay: A UK Empirical Study

Phillip McKnight, Cyril Tomkins, Charlie Weir and David Hobson

Journal of Management & Governance, 2000, vol. 4, issue 3, 173-187

Abstract: This study examines the implications that CEO age has onexecutive pay regarding data collected in a UK setting. Whereprior research has typically focused on total pay (salary plusbonus), this study offers a more complete conceptual model bysplitting pay into salary, annual bonus, and share options. Indoing so, we found that the relationship between CEO salaries andage are significantly related with this association weakeningover time. Another interesting finding not captured by priorresearch was that the relationship between CEO age and bonusappears to be non-linear in nature. Figures 2 which depicts thisnon-linear function suggest at about age 53, the proportion ofbonus as a percentage of salary begins to decrease at anincreasing rate. As a whole, these findings suggest corporate paycommittees should consider family and the financial circumstancesof the executive when designing remuneration schemes. Copyright Kluwer Academic Publishers 2000

Keywords: cash remuneration; CEO age; executive pay (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (8)

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DOI: 10.1023/A:1026755428942

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