Gentlemen do not talk about money: remuneration dispersion and firm performance relationship on British boards

Research output: Contribution to journalArticle

  • 7 Citations

Abstract

Using a sample of 781 U.K. firms over the period 2000–2008 we study the relationship between remuneration dispersion at executive board level and firm performance. We find that this relationship is sensitive to nationality composition of the executive boards. In contrast with findings on American data, British companies are characterized by a negative dispersion–performance relationship, i.e., the greater the dispersion is, the worse firm performance is, however, boards with American CEOs or at least 30% of American nationality non-CEO executives are characterized by a positive dispersion–performance relationship. The results are robust when controlling for various firm, board and CEO characteristics, including cross-listing on U.S. exchanges and having sales in the U.S. Implications for executive remuneration reforms and board diversity are discussed.
LanguageEnglish
Pages40-57
Number of pages18
JournalJournal of Empirical Finance
Volume27
Early online date31 Oct 2013
DOIs
StatusPublished - Jun 2014

Fingerprint

Remuneration
Firm performance
Nationality
Board characteristics
Executive remuneration
Cross-listing
Firm characteristics
Chief executive officer
CEO characteristics

Cite this

@article{4b9d3f1d8f10461d9329a8e192a45c22,
title = "Gentlemen do not talk about money: remuneration dispersion and firm performance relationship on British boards",
abstract = "Using a sample of 781 U.K. firms over the period 2000–2008 we study the relationship between remuneration dispersion at executive board level and firm performance. We find that this relationship is sensitive to nationality composition of the executive boards. In contrast with findings on American data, British companies are characterized by a negative dispersion–performance relationship, i.e., the greater the dispersion is, the worse firm performance is, however, boards with American CEOs or at least 30{\%} of American nationality non-CEO executives are characterized by a positive dispersion–performance relationship. The results are robust when controlling for various firm, board and CEO characteristics, including cross-listing on U.S. exchanges and having sales in the U.S. Implications for executive remuneration reforms and board diversity are discussed.",
author = "Anna Zalewska",
year = "2014",
month = "6",
doi = "10.1016/j.jempfin.2013.09.001",
language = "English",
volume = "27",
pages = "40--57",
journal = "Journal of Empirical Finance",
issn = "0927-5398",
publisher = "Elsevier",

}

TY - JOUR

T1 - Gentlemen do not talk about money

T2 - Journal of Empirical Finance

AU - Zalewska,Anna

PY - 2014/6

Y1 - 2014/6

N2 - Using a sample of 781 U.K. firms over the period 2000–2008 we study the relationship between remuneration dispersion at executive board level and firm performance. We find that this relationship is sensitive to nationality composition of the executive boards. In contrast with findings on American data, British companies are characterized by a negative dispersion–performance relationship, i.e., the greater the dispersion is, the worse firm performance is, however, boards with American CEOs or at least 30% of American nationality non-CEO executives are characterized by a positive dispersion–performance relationship. The results are robust when controlling for various firm, board and CEO characteristics, including cross-listing on U.S. exchanges and having sales in the U.S. Implications for executive remuneration reforms and board diversity are discussed.

AB - Using a sample of 781 U.K. firms over the period 2000–2008 we study the relationship between remuneration dispersion at executive board level and firm performance. We find that this relationship is sensitive to nationality composition of the executive boards. In contrast with findings on American data, British companies are characterized by a negative dispersion–performance relationship, i.e., the greater the dispersion is, the worse firm performance is, however, boards with American CEOs or at least 30% of American nationality non-CEO executives are characterized by a positive dispersion–performance relationship. The results are robust when controlling for various firm, board and CEO characteristics, including cross-listing on U.S. exchanges and having sales in the U.S. Implications for executive remuneration reforms and board diversity are discussed.

UR - http://www.scopus.com/inward/record.url?scp=84887379460&partnerID=8YFLogxK

UR - http://dx.doi.org/10.1016/j.jempfin.2013.09.001

U2 - 10.1016/j.jempfin.2013.09.001

DO - 10.1016/j.jempfin.2013.09.001

M3 - Article

VL - 27

SP - 40

EP - 57

JO - Journal of Empirical Finance

JF - Journal of Empirical Finance

SN - 0927-5398

ER -