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New Perspectives on the Governance of Executive Compensation: Examining the Role and Effect of Compensation Consultants

Conyon, Martin and Peck, S and Sadler, G (2011) New Perspectives on the Governance of Executive Compensation: Examining the Role and Effect of Compensation Consultants. Journal of Management and Governance, 15 (1). pp. 29-58. ISSN 1385-3457

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Abstract

We develop a multi-theoretic approach, drawing on economic, institutional, managerial power and social comparison literatures to explain the role of the external compensation consultant in the top management pay setting institutional field. Taking advantage of recent disclosure requirements in the UK, we collect data on compensation consultant use in 232 large companies. We show that consultants are a prevalent part of the CEO pay setting scene, and document evidence of all advisor use. Our econometric results show that consultant use is associated with firm size and the equity pay mix. We also show that CEO pay is positively associated with peer firms that share consultants, with higher board and consultant interlocks, and some evidence that where firms supply other business services to the firm, CEO pay is greater.

Item Type: Article
Journal or Publication Title: Journal of Management and Governance
Uncontrolled Keywords: Executive compensation ; Consultants
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Departments: Lancaster University Management School > Accounting & Finance
ID Code: 53915
Deposited By: ep_importer_pure
Deposited On: 26 Jun 2012 09:25
Refereed?: Yes
Published?: Published
Last Modified: 26 Jul 2012 20:19
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/53915

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