The Governance of CEO Incentives in English NHS Hospital Trusts

46 Pages Posted: 21 Mar 2008

See all articles by Joan Ballantine

Joan Ballantine

University of Ulster; University of Ulster

John Forker

Queen's University Management School

Margaret Greenwood

University of Bath School of Management; University of Bath - School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: March 2008

Abstract

Institutional arrangements for the governance of CEO pay and turnover in English NHS Hospital Trusts replicate best practice for listed companies but with the additional feature of centrally imposed performance measurement. In this paper we investigate the impact of this unique combination of incentives on the relationship between CEO pay/turnover and Trust financial and operating performance in the period 1998-2005. We identify a strong association between poor Trust performance and CEO turnover but find little evidence that remuneration committees relate pay to performance in the best performing Trusts. Our findings raise questions about the economic rationale for remuneration committees in the governance of NHS Hospital Trusts.

Keywords: CEO incentives, NHS Hospital Trusts, performance, principal-agent analysis, remuneration committees

JEL Classification: G34, I18, J33, M41, M47

Suggested Citation

Ballantine, Joan Amanda and Ballantine, Joan Amanda and Forker, John and Greenwood, Margaret J. and Greenwood, Margaret J., The Governance of CEO Incentives in English NHS Hospital Trusts (March 2008). Available at SSRN: https://ssrn.com/abstract=1111534 or http://dx.doi.org/10.2139/ssrn.1111534

Joan Amanda Ballantine

University of Ulster ( email )

Northland Road
Londonderry, BT48 7JL
Northern Ireland

University of Ulster ( email )

Jordanstown Campus
Shore Road
Newtownabbey, Northern Ireland BT37 0QB
Northern Ireland

John Forker (Contact Author)

Queen's University Management School ( email )

25 University Square
Belfast, Northern Ireland BT7 1NN
Northern Ireland

Margaret J. Greenwood

University of Bath - School of Management ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom
01225 383227 (Phone)

University of Bath School of Management ( email )

Bath, BA2 7AY
United Kingdom

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