Executive remuneration, financial performance and corporate governance in UK and Spanish listed firms

  • Natalia Krasnikova

Student thesis: Doctoral ThesisDoctor of Philosophy


This study examines the relationship between executive directors’ remuneration and the financial performance and corporate governance arrangements of the UK and Spanish listed firms. These countries’ corporate governance framework has been shaped by differences in legal origin, culture and backgrounds. For example, the UK legal arrangements can be defined as to be constituted in common-law, whereas for Spanish firms, the legal arrangement is based on civil law.
We estimate both static and dynamic regression models to test our hypotheses and we estimate our regression using Ordinary Least Squares (OLS) and the Generalised Method of Moments (GMM).
Estimated results for both countries show that directors’ remuneration levels are positively related with measures of firm value and financial performance. This means that remuneration levels do not lead to a point whereby firm value is reduced due to excessive remuneration. These results hold for our long-run estimates. That is, estimates based on panel cointegration and panel error correction. Measures of corporate governance also impacts on the level of executive pay. Our results have important implications for existing corporate governance arrangements and how the interests of stakeholders are protected. For example, long-run results suggest that directors’ remuneration adjusts in a way to capture variation in financial performance
Date of Award25 Jan 2016
Original languageEnglish
Awarding Institution
  • Aston University
SupervisorNathan L Joseph (Supervisor)


  • agency theory
  • dynamic setting
  • director's compensation
  • panel cointegration
  • panel error-correction models (ECMs)

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