The CEO-To-Employee Pay Gap: Evidence from UK Firms

22 Pages Posted: 21 Sep 2016  

Martin J. Conyon

Lancaster University - Management School; Wharton School, Center for Human Resources

Laura Read

theUKHighStreet.com LTD

Date Written: July 01, 2000

Abstract

This paper investigates the CEO-to-employee pay gap. Empirical evidence is provided for a sample of about 900 publicly traded UK firms from 1984 to 1998. CEOs were paid about thirteen times the typical employee pay during the sample period. The CEO-to-employee pay ratio sharply increased from about 7 at the start of the period to about 19 at the end of the period. The CEO-to-employee pay gap is larger in union firms but this fact is accounted for by differences in enterprise scale. The CEO-employee pay gap is bigger in large firms. Conditional on firm size, the predicted CEO-to-employee pay gap is, in fact, smaller in union firms compared to non-union firms. Finally, the distribution of the CEO-to-employee pay gap is different for union and non-union firms. Specifically, the predicted size-adjusted gap is generally smaller in union firm contexts.

Keywords: CEO pay; Employee Pay; Unions

JEL Classification: G3

Suggested Citation

Conyon, Martin J. and Read, Laura, The CEO-To-Employee Pay Gap: Evidence from UK Firms (July 01, 2000). Available at SSRN: https://ssrn.com/abstract=2840487 or http://dx.doi.org/10.2139/ssrn.2840487

Martin J. Conyon (Contact Author)

Lancaster University - Management School ( email )

Bailrigg
Lancaster, LA1 4YX
United Kingdom

Wharton School, Center for Human Resources ( email )

3600 Locust Walk
Philadelphia, PA 19104-6365
United States

Laura Read

theUKHighStreet.com LTD

158 Harefield Road
Coventry, CV2 4BS
United Kingdom

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