The Regulation of Executive Compensation

The Regulation of Executive Compensation

Greed, Accountability and Say on Pay

Kym Maree Sheehan

Using the model of the regulated remuneration cycle, and drawing upon evidence of its operation from interviews, voting data and remuneration reports from UK and Australian companies, the book demonstrates whether say on pay can operate successfully to both constrain executive greed and ensure accountability exists for company performance and decision-making.

Chapter 5: UK remuneration practice – best practice?

Kym Maree Sheehan

Subjects: law - academic, labour, employment law


The annual review encompasses a series of decisions about remuneration: the annual fi xed salary, the STI targets and potential payouts, the LTI grants of share- based payments, and decisions about the previous year’s bonus. Figure 5.1 presents a ‘typical’ annual review, based on interviews with UK remuneration committee representatives and remuneration consultants. The light text boxes represent remuneration consultant input, with the dark boxes representing decisions made by the remuneration committee. As one FTSE100 remuneration committee chair I interviewed noted: the thing I have done . . . is just insisted all of these decisions have got to be made at the start of the fi nancial year. Because you do get an awful lot of drift on remuneration committees and people put off diffi cult decisions. While the remuneration committee’s process has been described by Main et al as validating, calibrating and conforming, it is difficult to fi t the committee’s process within the typical description of the board role as one of ‘performance and conformance’.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information