Bender, Ruth (2004) The determination of directors' remuneration in selected FTSE 350 companies. PhD thesis, University of Warwick.

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Abstract

This thesis has adopted a qualitative approach to research into executive remuneration, to look inside the 'black box' of process. Executives, nonexecutives and others involved in the remuneration-setting process were interviewed in order to establish how executive remuneration is determined. In all, 40 interviews were conducted, covering 12 FTSE 350 companies plus other stakeholder bodies.
The interviews yielded rich data illuminating the processes followed by the companies, and highlighting their similarities and differences. These data were considered in the light of existing economic, social-psychological and organisational theory approaches,n one of which proved sufficient, either alone or in combination, to explain what was happening.
Companies determine the level of their executive pay based on their interpretation of 'the market', but the research shows that such a market is a construct that does not exist independently. They determine the structure of their executive pay based mainly on structures successfully adopted by other companies, and those considered acceptable to the investing institutions and regulators. Institutional theory explanations and the need for legitimacy are clearly seen in the data.
A further finding of the research was that all of the companies had made changes to their remuneration schemes, some major. The various reasons for these changes included changes (actual or desired) to the corporate environment, changes to key personnel, and, notably, the need to increase pay packages that were 'below-market'. Incentive schemes that did not pay out were also changed.
Finally, as regards process, it was clear that each of the case companies followed 'good governance' practices. It was also clear that each did this in a different way. For some, the process was managed by the non-executives; in others the executives had a leading role. The relationships between the protagonists had an important impact on the resultant governance processes.

Item Type:	Thesis or Dissertation (PhD)
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Library of Congress Subject Headings (LCSH):	FTSE International, Directors of corporations -- Salaries, etc -- Great Britain, Bonus system -- Great Britain, Incentives in industry -- Great Britain
Official Date:	October 2004
Dates:	Date Event October 2004 Submitted
Institution:	University of Warwick
Theses Department:	Warwick Business School
Thesis Type:	PhD
Publication Status:	Unpublished
Supervisor(s)/Advisor:	Porter, Brenda ; Hoskin, Keith ; Legge, Karen
Sponsors:	Institute of Chartered Accountants in England and Wales. Centre for Business Performance (ICAEW)
Format of File:	pdf
Extent:	349 leaves : charts
Language:	eng
URI:	http://wrap.warwick.ac.uk/id/eprint/1206

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