BOARD CONTROL, REMUNERATION COMMITTEES, AND TOP MANAGEMENT COMPENSATION

Using panel data on large, publicly traded U.K. companies gathered bet ween 1991 and 1994, we examined the role of board control and remunera tion committees in determining management compensation. Board monitori ng, measured in terms of the proportion of nonexecutive directors on a board and the presence of remuneration committees and CEO duality, ha d only a limited effect on the level of top management pay. An importa nt conclusion was that top management pay and corporate performance ar e more aligned in companies with outsider-dominated boards and remuner ation committees.