Determinants and value relevance of UK CEO pay slice

This paper studies the CEO pay slice (CPS) of UK listed firms during the period 2003 to 2009. We investigate the determinants of CPS. We study the links between CPS and measures of firm performance. We find that firms with higher levels of corporate governance ratings and those with more independent boards tend to have higher CPS. In addition, we find that CEOs are more likely to receive lower compensation when they chair the board and when they work in firms with large board size. We also find that higher CPS is positively associated with firm performance after controlling for the firm-specific characteristics and corporate governance variables. We get compatible results when we examine the association between equity-based CPS and firm performance. Our results remain robust to alternative accounting measures of firm performance. Our results suggest that high UK CPS levels do indeed reflect top managerial talent rather than managerial power

Greenbury Report (UK)

The Greenbury Report on Directors Remuneration (1995) (hereafter called the Greenbury Report) was one of the first comprehensive governance codes directly addressing executive and director remuneration. The Greenbury Report was commissioned by the Confederation of British Industry in response to public concerns over recently privatized public utilities and the salaries and bonuses earned by executives, while they implemented job cuts, and service price increases. The Greenbury Report recommended an independent remuneration committee, linking executive pay to corporate financial and operational performance measures, and increased the requirements for disclosure and transparency on directors’ remuneration. However, the credibility of the Greenbury Report was challenged due to the composition of the group; it was not deemed to be independent of the sector it was to investigate, and it was argued that its recommendations did not go far enough. The financial crisis of 2008 highlighted the failure of the Greenbury Report’s recommendations for limiting excessive executive pay. In particular, the Walker Review of the Banking Sector found that performance-based bonus schemes in banking corporations that are supposed to align executive objectives with shareholder objectives increased corporate risk in the period leading up to the financial crisis. In addition, during the crisis, executive pay in large publicly listed corporations (PLCs) continued to increase, while workers’ wages stagnated. Therefore, despite Greenbury’s recommendations, executive pay continued, and still continues, to be a concern for the public and policymakers alike. Nonetheless, improved transparency on remuneration and a greater linking of pay to performance followed from the Greenbury Report and most corporations now include operational measures linked to performance and sustainability

Beyond shareholder primacy? Reflections on the trajectory of UK corporate governance.

Core institutions of UK corporate governance, in particular the City Code on Takeovers and Mergers, the Combined Code on Corporate Governance and the law on directors’ duties, are strongly orientated towards the norm of shareholder primacy. Beyond the core, however, stakeholder interests are better represented, in particular at the intersection of insolvency and employment law. This reflects the influence of European Community laws on information and consultation of employees. In addition, there are signs that some institutional shareholders are redirecting their investment strategies, under government encouragement, away from a focus on short-term returns, in such a way as to favour stakeholder-inclusive practices by firms. On this basis we suggest that the UK system is currently in a state of flux and that the debate over shareholder primacy has not been concluded

Beyond the Hypercube:Evolutionary Accessibility of Fitness Landscapes with Realistic Mutational Networks

Evolutionary pathways describe trajectories of biological evolution in the space of different variants of organisms (genotypes). The probability of existence and the number of evolutionary pathways that lead from a given genotype to a better-adapted genotype are important measures of accessibility of local fitness optima and the reproducibility of evolution. Both quantities have been studied in simple mathematical models where genotypes are represented as binary sequences of two types of basic units, and the network of permitted mutations between the genotypes is a hypercube graph. However, it is unclear how these results translate to the biologically relevant case in which genotypes are represented by sequences of more than two units, for example four nucleotides (DNA) or 20 amino acids (proteins), and the mutational graph is not the hypercube. Here we investigate accessibility of the best-adapted genotype in the general case of K > 2 units. Using computer generated and experimental fitness landscapes we show that accessibility of the global fitness maximum increases with K and can be much higher than for binary sequences. The increase in accessibility comes from the increase in the number of indirect trajectories exploited by evolution for higher K. As one of the consequences, the fraction of genotypes that are accessible increases by three orders of magnitude when the number of units K increases from 2 to 16 for landscapes of size N ∼ 106 genotypes. This suggests that evolution can follow many different trajectories on such landscapes and the reconstruction of evolutionary pathways from experimental data might be an extremely difficult task

Retailing in the next millennium The 1999 GKN Lecture

GKN Lecture in ManagementAvailable from British Library Document Supply Centre-DSC:5334.434(22) / BLDSC - British Library Document Supply CentreSIGLEGBUnited Kingdo