Heads I win, tails you lose? A career analysis of executive pay and corporate performance

Ian Gregory-Smith () and Brian G. M. Main

Cambridge Journal of Economics, 2015, vol. 39, issue 5, 1373-1398

Abstract: The paper adopts a novel career perspective to examine theories of corporate control in the context of executive pay. Detailed career histories of boardroom executives in all FTSE 350 companies between 1996 and 2008 are utilised. The paper highlights the failure of existing arrangements to adjust pay outcomes where career performance is poor. The leading theoretical reasons for this disconnect, namely managerial power and neoinstitutionalism, are not consistent with the data. The paper identifies a settling-up process at work, whereby pay is adjusted in the light of both past pay and past performance. From a policy perspective, a case is made for adopting a cumulative or career-oriented approach to rewarding executive performance through the use of truly long-term incentives in the form of ‘career shares’.

Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1093/cje/beu049 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:cambje:v:39:y:2015:i:5:p:1373-1398.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Cambridge Journal of Economics is currently edited by Jacqui Lagrue

More articles in Cambridge Journal of Economics from Cambridge Political Economy Society Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().