TY - JOUR
T1 - Institutional investors and director pay
T2 - An empirical study of UK companies
AU - Dong, Min
AU - Ozkan, Aydin
PY - 2008/2/1
Y1 - 2008/2/1
N2 - This paper empirically examines the determinants of director pay for a sample of listed non-financial firms in the UK by focusing on the effects of institutional ownership on both director pay and pay-performance relationship. Our analysis reveals that institutional investors, as a whole, make no appreciable difference in the determination of director pay level and pay-performance relationship. However, after we divide institutions into "dedicated" and "transient" groups. We show that dedicated institutions restrain the level of director pay and strengthen pay-performance link. This is consistent with our expectation that dedicated (long-horizon) institutions are more involved in corporate governance and serve a better monitoring and disciplining role than other short-horizon institutions.
AB - This paper empirically examines the determinants of director pay for a sample of listed non-financial firms in the UK by focusing on the effects of institutional ownership on both director pay and pay-performance relationship. Our analysis reveals that institutional investors, as a whole, make no appreciable difference in the determination of director pay level and pay-performance relationship. However, after we divide institutions into "dedicated" and "transient" groups. We show that dedicated institutions restrain the level of director pay and strengthen pay-performance link. This is consistent with our expectation that dedicated (long-horizon) institutions are more involved in corporate governance and serve a better monitoring and disciplining role than other short-horizon institutions.
KW - Director pay
KW - Institutional ownership
KW - Pay-performance relationship
UR - http://www.scopus.com/inward/record.url?scp=37449023915&partnerID=8YFLogxK
U2 - 10.1016/j.mulfin.2007.06.001
DO - 10.1016/j.mulfin.2007.06.001
M3 - Article
AN - SCOPUS:37449023915
VL - 18
SP - 16
EP - 29
JO - Journal of Multinational Financial Management
JF - Journal of Multinational Financial Management
SN - 1042-444X
IS - 1
ER -