Compensation consultants and executive pay: evidence from the United States and the United Kingdom

Martin J. Conyon, Simon I. Peck, Graham V. Sadler

Research output: Contribution to journalArticle

Abstract

Executive Overview Executive compensation consultants are investigated using data from the United States and the United Kingdom. The study yields a number of findings. First, CEO pay is generally greater in firms that use compensation consultants, consistent with a rent-extraction theory of executive pay. Second, the amount of equity used in the CEO compensation package, such as stock options, is greater in firms that use consultants. This is consistent with alignment of manager and shareholder interests. Third, there is little evidence that using consultants with potential conflicts of interest, such as supplying other business to client firms, leads to greater CEO pay or the adverse design of pay contracts. Copyright by the Academy of Management.

Original languageEnglish
Pages (from-to)43-55
Number of pages13
JournalAcademy of Management Perspectives
Volume23
Issue number1
DOIs
Publication statusPublished - 1 Feb 2009

Keywords

  • executive compensation
  • business consultants
  • cheif executive officers
  • employee fringe benefits

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