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The Prince and the Pauper? CEO Pay in the United States and United Kingdom

Martin J. Conyon and Kevin J. Murphy
The Economic Journal
Vol. 110, No. 467, Features (Nov., 2000), pp. F640-F671
Published by: Wiley on behalf of the Royal Economic Society
Stable URL: http://www.jstor.org/stable/2667770
Page Count: 32
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The Prince and the Pauper? CEO Pay in the United States and United Kingdom
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Abstract

We document differences in CEO pay and incentives in the United States and the United Kingdom for 1997. After controlling for size, sector and other firm and executive characteristics, CEOs in the US earn 45% higher cash compensation and 190% higher total compensation. The calculated effective ownership percentage in the US implies that the median CEO receives 1.48% of any increase in shareholder wealth compared to 0.25% in the UK. The differences, can be largely attributed to greater share option awards in the US arising from institutional and cultural differences between the two countries.

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