University of Hertfordshire

The Role of the Law in the Determination of Executive Remuneration

Research output: Chapter in Book/Report/Conference proceedingConference contribution

  • Ernestine Gheyoh Ndzi
  • Lee Roach
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Original languageEnglish
Title of host publicationProcs Annual International Conference on Law, Economics and Politics
Subtitle of host publicationAICLEP 2014
PublisherFLE Learning Ltd
Pages29-39
ISBN (Print)978-0-9930368-0-4
Publication statusPublished - 2014
EventAnnual Int Conf on Law, Economics and Politics (AICLEP 2014) - Oxford, United Kingdom
Duration: 1 Sep 20143 Sep 2014

Conference

ConferenceAnnual Int Conf on Law, Economics and Politics (AICLEP 2014)
Country/TerritoryUnited Kingdom
CityOxford
Period1/09/143/09/14

Abstract

Executive remuneration has been a contentious issue in the UK since the early 1990s. The lack of link between executive pay and company performance has been the shareholder’s concern. The law makes no provisions on how executive remuneration should be determine, rather it takes a corrective approach when executive pay levels are high through remuneration disclosure requirement, shareholder vote, and other remedies available to the shareholders. The effectiveness of the role of the law to influence executive remuneration pay setting is examined in this study. The study found that firstly, disclosure requirements tends to favour high executive remuneration levels. Secondly, shareholders are not using the voting powers vested on them to influence the remuneration setting process. Finally, the courts are reluctant to interfere in executive remuneration setting process. This indicates that the role of the law is unable to influence the pay setting process and curb excessive executive pay

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