CEO pay and corporate financialization

The UK in comparative perspective

Authored by: Andreas Kornelakis , Howard Gospel

The Routledge Companion to Reward Management

Print publication date:  November  2018
Online publication date:  November  2018

Print ISBN: 9781138294264
eBook ISBN: 9781315231709
Adobe ISBN:

10.4324/9781315231709-31

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Abstract

Contemporary debates over the level of CEO pay are considered, seeking to explain the widening CEO-to-worker pay gap over recent decades. The relevance of economics and political economy explanations are discussed to understand how and why CEO pay has increased over time and across countries; and evidence looking at the UK and other advanced industrialized countries comparatively is examined. An alternative explanation is put forward, centred on the trend towards corporate financialization that cross-cuts the clustering around varieties of capitalism. Finally, the debate on how to curb CEO pay in the UK and elsewhere is briefly considered before the chapter concluding by sketching implications for policy and practice that emphasize the need to link reward practices with a wider set of objectives beyond corporate profitability and tie better with the interests of other stakeholders.

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