CORPORATE GOVERNANCE AND EXECUTIVE-COMPENSATION

This paper examines the impact of corporate governance innovations on top director compensation in a sample of 213 large UK companies betwee n 1988 and 1993. An enabling factor in the analysis is access to surve y data on recent corporate governance changes in UK companies, The pap er finds that director compensation and current shareholder returns ar e positively correlated. However, in line with other recent UK researc h the paper finds little evidence of a link between directors' pay (sa lary and bonus) and pre-dated shareholder returns. There is also some evidence that governance variables play a role in shaping top director pay. Companies which adopt remuneration committees are seen, in some circumstances, to have lower growth rates in top director compensation . Separating the roles of CEO and chairman, however, appears to play n o part in shaping directors' pay. (C) 1997 Elsevier Science B.V.