C.E.O Remuneration

C.E.O remuneration has been observed as significant in extenuating divergence of interest b/w executives & share--holders in firms. It has been widely observed that remuneration packages may potentially play a significant role in empowering and motivating executives. Therefore it is significant to find out how firms set C.E.O remuneration packages & whether there is a link b/w financial performance & remuneration.
In comparison to studies conducted in United States on C.E.O remuneration in U.K is quite restricted. Key conclusions from conducted studies are that there is a weak relation b/w C.E.O pay & financial performance in U.K firms. One probable clarification for such weak statistical findings is that previously researchers have relied heavily on total cash pay as the main source to measure C.E.O remuneration. Thus, one can criticize those studies for their analysis excluding equity--based component of remuneration. They omit potentially financial performance--sensitive component of remuneration, e.g., share options & share awards. As a result, they ignore interesting differences in extent to which cash & equity--based components of remuneration are affected by firm financial performance.Hampel (2008) report led to changes in disclosure rules about information on executive remuneration packages in firm annual reports & made it possible to analyse total remuneration rather than cash only component of remuneration (salary bonus).

Objective of the Study
The objective of this research is to shed a new light on relation b/w C.E.O remuneration & firm financial performance in U.K firms. It contributes to studies for U.K firms by employing a broader measure of remuneration, which includes cash & equity--based components of C.E.O remuneration, & also C.E.O wealth based on C.E.O's holdings of share options & share awards. Thus, researchers investigate relation b/w C.E.O pay & financial performance...