Board of directors (BOD) bring valuable human and relational capital to firms but may act as self-interested agents by design. The purpose of this study is to investigate how the compensation of BOD members in high-technology sectors affects overall firm performance. We tested our specific hypotheses using panel regression methodology on data gathered from the CRSP, Compustat, BoardEx, and ExecuComp databases. Our final sample consisted of 9,127 firm years, and the companies in our sample were all high-tech publicly traded U.S. firms from 1992 to 2019. Our results showed that there is an association between BOD’s pay structure and firm performance (accounting-based return on assets and market-based Tobin’s Q). Our findings demonstrate originality and contribute to the literature since we empirically demonstrate that the level of variable BOD pay has a diminishing effect on return on assets and Tobin’s Q. This study advances our knowledge of executive compensation in the high technology sector.

Shareholder say-on-pay voting allows institutional investors to influence the incentives of managers and, consequently, corporate behaviour. Surprisingly, the preferences of investors on executive compensation have been largely overlooked in the ongoing debates on the role of say-on-pay in corporate governance and the impact of shareholder stewardship on sustainable corporate behaviour. The analysis of investor disclosed explanations of say-on-pay votes in the FTSE 100 companies during 2013–2021 shows that institutional investors rely repeatedly on several dominant themes aimed at improving the incentives of corporate managers and controlling managerial rent extraction. But shareholder interests remain the core focus of say-on-pay votes, with only few investors demanding that companies reward executive directors for protecting the interests of a broader range of affected stakeholders. Additionally, most investors can be grouped into several clusters formed around the voting recommendations of proxy advisers. A group of UK-based institutional investors stands out by taking a more individualistic and diverse approach to the stewardship of executive compensation. These findings highlight the role of local investors in the oversight of executive pay, the growing influence of proxy advisers along with the increasing share of foreign institutional investors, and the influence of best practice governance codes in driving investor stewardship preferences.

We study the influence of the corporate board network on executive pay for 3,395 US firms between 1990 and 2015. We identify three elementary structures through which the interlocking network reflects forms of inter-group reciprocity across firms: restricted exchange, when two executives sit on each other’s respective boards; delayed exchange, when y sits on the board of x after the end of x’s mandate on the board of y; and generalized exchange, when x sits on the board of y, who sits on the board of z, who sits on the board of x. These ties, which are overrepresented, are related to higher executive pay, but are not related to firm performance, which we interpret as a form of rent extraction. We use the Sarbanes-Oxley Act (2002) as a natural experiment to confirm our results. The impact on pay disappears after 2004, once these types of exchanges are constrained.

There has recently been public discussion of the rewards available to senior staff in English and Welsh charities. However, that discussion is usually based on examples of individual salaries, or on unrepresentative and small subsets of the charity population. To provide a robust and informed basis for debate, we have conducted analyses of evidence on the payment of high salaries (defined as the numbers of people paid above £60,000 p.a., a reporting threshold used by the Charity Commission) in: (a) a representative sample of c.10,000 English and Welsh charities, and (b) surveys of individuals regarding comparative salary levels in different sectors of the economy. Overall, survey data show that the proportion of staff in receipt of high salaries is lower than average in the third sector than in other sectors. Information from charity annual accounts is used to demonstrate which charities are more likely than others to pay such salaries, and to relate the likelihood of paying high salaries to charity characteristics (income, location and subsector). We show that the distribution of high pay in the charitable sector is largely a function of the size and complexity of organisations, and is generally unrelated to subsector or income mix.

The question of how to optimise corporate governance with regard to the structure of remuneration systems and, particularly, executive compensation is presently more hotly debated than ever. Since flawed executive pay structures are considered to have contributed to the financial crisis by encouraging short-term risk-taking at the expense of long-term security, remuneration systems are re-evaluated at national, European and international level. The analysis of current regulatory and legislative reform initiatives of selected countries in Europe (United Kingdom, Switzerland and Germany) and the United States shows the fundamental common objective to sustain market confidence and promote financial stability by removing incentives for inappropriate risk-taking by firms. The internationally emerging remuneration model strives to ensure, to the widest extent possible, congruency between incentives and risks. The need for firms to concentrate on long-term rather than short-term performance is a recurring theme of the reform movement. However, a closer look at the different national regulatory and legislative initiatives reveals that the structural approaches to how to design a well-balanced remuneration system vary significantly as to the scope of application and the intensity and detail of the new regulation and legislation.