ABSTRACT
CORPORATE GOVERNANCE PRACTICES IN THE United Kingdom received increased attention in the 1990s, culminating in influential reports issued by the Cadbury (1992), Greenbury (1995) and Hampel (1998) committees. Among other recommendations, the reports outlined a best-practice framework for setting executive pay, and significantly expanded disclosure rules for UK executive compensation. The Greenbury and Hampel reports were, in part, a response to a growing controversy over chief executive officer (CEO) pay levels triggered when executives in several recently privatised electric utilities exercised share options worth millions of pounds. However, in spite of these reports, CEO pay levels rose more than 18% in 1997 alone, even as publicsector workers were being asked to accept raises of less than 3% (Buckingham and Cowe,1998 a, b).The continuing controversy, coupled with enhanced data availability through the new disclosure requirements, has sparked considerable academic interest in UK executive pay practices.
