Multiple Compensation Consultants and CEO Pay
University of Twente - Department of Business Administration
Edinburgh Napier University
August 1, 2011
The study examines the practice of employing multiple compensation consultants. Data for a sample of UK companies over the period 2003-2006 are analyzed using a variety of econometric methods. We find that CEOs receive higher equity-based pay when firms employ more than one compensation consultant. Further, an increase in the number of compensation consultants is associated with an increase in CEO pay, whereas no decline in CEO pay takes place when firms reduce the number of pay consultants. We also observe that the market shares of compensation consultant are positively related to CEO compensation. The finding is consistent with the conjecture that compensation consultants act to survive competition from other consultants.
Number of Pages in PDF File: 41
Keywords: Executive Compensation, CEO Pay, Compensation Consultant, Corporate Governance
JEL Classification: G34, J33, M52working papers series
Date posted: July 22, 2010 ; Last revised: August 21, 2011
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