International Executive Pay: Current Practices and Future Trends

Randall S. Thomas, INTERNATIONAL EXECUTIVE PAY: CURRENT PRACTICES AND FUTURE TRENDS, Elgar Publishing, 2009

Vanderbilt Law and Economics Research Paper No. 08-26

87 Pages Posted: 9 Sep 2008

See all articles by Randall S. Thomas

Randall S. Thomas

Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Law School

Date Written: September 8, 2008

Abstract

This article compares executive pay practices in the U.S. with those employed elsewhere in the world. After providing an overview of current practices, it goes on to analyze whether there is likely to be a convergence of these practices. It first examines the influence of market based factors, such as evolving share ownership patterns, cross-border hiring, transnational mergers and acquisitions, and the growth of multinational enterprises, on the likelihood of convergence occurring. It concludes that these factors point in the direction of increasing convergence in executive pay. Next, the paper discusses the influence of legal regulations, including corporate law, judicial interpretations of fiduciary principles, shareholder voting requirements, restrictions on stock option plans and disclosure rules on comparative executive pay practices. Other legal regimes, such as, tax law, labor law, and "soft" law that might also influence executive compensation are also scrutinized to see how they will affect pay convergence. In its final section, the article considers the effects of culture in several countries and how it impacts compensation levels and practices.

Keywords: shareholders, executive compensation, CEO pay, benefits, cross border hiring, transnational mergers and acquisitions, judicial interpretations of fiduciary principles

JEL Classification: G3, G30, K2, K22, J33

Suggested Citation

Thomas, Randall S. and Thomas, Randall S., International Executive Pay: Current Practices and Future Trends (September 8, 2008). Randall S. Thomas, INTERNATIONAL EXECUTIVE PAY: CURRENT PRACTICES AND FUTURE TRENDS, Elgar Publishing, 2009, Vanderbilt Law and Economics Research Paper No. 08-26, Available at SSRN: https://ssrn.com/abstract=1265122

Randall S. Thomas (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States

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