The Structure of Executive Compensation Contracts: UK Evidence

Long Range Planning

Volumn 33, Issue 4, 2000, Pages 478-503

  Conyon, Martin J ^a   Peck, Simon I ^b   Read, Laura E ^c   Sadler, Graham V ^c  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

^b CITY UNIVERSITY   (United Kingdom)

^c UNIVERSITY OF WARWICK   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0347883133     PISSN: 00246301     EISSN: None     Source Type: Journal    
DOI: 10.1016/S0024-6301(00)00054-6     Document Type: Article

References (29)

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3. K. J. Murphy, Executive compensation in O. Ashenfelter and D. Card (eds), Handbook of Labor Economics, vol. 3. North Holland, Amsterdam (1999).
4. M. J. Conyon and K. J. Murphy, The prince and the pauper? CEO pay in the US and UK, working paper, University of Southern California (1999).
5. M. J. Conyon and G. V. Sadler, CEO compensation, option incentives and information disclosure, working paper, University of Warwick (1999).
6. B. Hall and K. Murphy, Optimal exercise prices for executive stock options, paper presented at the American Economics Association, Boston, MA (2000).
7. Murphy, (see Reference 3); J. Core and W. Guay, Estimating the value of stock option portfolios and their sensitivities to price and volatility, working paper, Wharton School, University of Pennsylvania (1999); W. Guay, The sensitivity of CEO wealth to equity risk: an analysis of the magnitude and determinants, Journal of Financial Economics 53, 43-71 (1999); D. Yermack, Do corporations award CEO stock options effectively? Journal of Financial Economics 39, 237-269 (1995).
8. Murphy, (see Reference 3); J. Core and W. Guay, Estimating the value of stock option portfolios and their sensitivities to price and volatility, working paper, Wharton School, University of Pennsylvania (1999); W. Guay, The sensitivity of CEO wealth to equity risk: an analysis of the magnitude and determinants, Journal of Financial Economics 53, 43-71 (1999); D. Yermack, Do corporations award CEO stock options effectively? Journal of Financial Economics 39, 237-269 (1995).
9. Murphy, (see Reference 3); J. Core and W. Guay, Estimating the value of stock option portfolios and their sensitivities to price and volatility, working paper, Wharton School, University of Pennsylvania (1999); W. Guay, The sensitivity of CEO wealth to equity risk: an analysis of the magnitude and determinants, Journal of Financial Economics 53, 43-71 (1999); D. Yermack, Do corporations award CEO stock options effectively? Journal of Financial Economics 39, 237-269 (1995).
10. Murphy, (see Reference 3); J. Core and W. Guay, Estimating the value of stock option portfolios and their sensitivities to price and volatility, working paper, Wharton School, University of Pennsylvania (1999); W. Guay, The sensitivity of CEO wealth to equity risk: an analysis of the magnitude and determinants, Journal of Financial Economics 53, 43-71 (1999); D. Yermack, Do corporations award CEO stock options effectively? Journal of Financial Economics 39, 237-269 (1995).
11. M. J. Conyon, P. Gregg and S. Machin, Taking care of business: executive compensation in the UK Economic Journal 105, 704-715 (1995).
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13. Murphy, (see Reference 3); Conyon and Murphy (1999) (see Reference 4); B. Hall and J. Liebman, Are CEOs really paid like bureaucrats? Quarterly Journal of Economics 113, 653- 691 (1998).
14. Murphy, (see Reference 3); Conyon and Murphy (1999) (see Reference 4); B. Hall and J. Liebman, Are CEOs really paid like bureaucrats? Quarterly Journal of Economics 113, 653-691 (1998).
15. Hall and Liebman, (see Reference 9) (1998).
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17. M. J. Conyon, C. Mallin and G.V. Sadler, The disclosure of directors' share option information, Applied Financial Economics, forthcoming; Association of British Insurers, Long Term Remuneration for Senior Executives, ABI, London (1994); ABI, Share Options and Profit Sharing Incentive Schemes, ABI, London (1995); R. Hampel, Committee on Corporate Governance: Final Report, Gee, London (1998).
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19. M. J. Conyon, C. Mallin and G.V. Sadler, The disclosure of directors' share option information, Applied Financial Economics, forthcoming; Association of British Insurers, Long Term Remuneration for Senior Executives, ABI, London (1994); ABI, Share Options and Profit Sharing Incentive Schemes, ABI, London (1995); R. Hampel, Committee on Corporate Governance: Final Report, Gee, London (1998).
20. M. J. Conyon, C. Mallin and G.V. Sadler, The disclosure of directors' share option information, Applied Financial Economics, forthcoming; Association of British Insurers, Long Term Remuneration for Senior Executives, ABI, London (1994); ABI, Share Options and Profit Sharing Incentive Schemes, ABI, London (1995); R. Hampel, Committee on Corporate Governance: Final Report, Gee, London (1998).
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26. Clarke et al. (1998).
27. 2=0.423). The LTIP coefficient (transformed to a marginal estimate) indicates whether the company has introduced an LTIP plan. The estimate is -0.64. This suggests that after controlling for size and industry factors, companies that introduce an LTIP plan are 64 per cent less likely to have their CEOs participate in the executive stock option programme. Of course, this is entirely consistent with the company operating an executive option programme but excluding the CEO from participating in it.
28. LAPFF (1999).
29. PIRC (1999).