ABSTRACT
Chapter 3 addresses the relevant academic research on executive remuneration consultants (and their in-house counterparts). The author initially provides an overview to portray the overall scene. He then discusses the relevant academic research in more detail for readers who may wish to trace how such research covers the way in which remuneration consultants work, the conflicts of interest they face and how they manage these in carrying out their advisory role. This can be viewed from differing perspectives/theories of the executive remuneration pay determination process: namely, ‘rents capture’, whereby executive remuneration consultants are part of executive remuneration ‘problems’, or, alternatively, ‘optimal contracting’, in which they are part of the solution to these. The former argues that remuneration consultants are in effect complicit in enabling executive directors to receive excessive pay packages, whereas the latter stresses the value of remuneration consultants in the design of market competitive packages – with incentive arrangements aimed at aligning the interests of executive directors with those of shareholders and promoting enhanced levels of business and share price performance. Although quantitative research papers on executive remuneration consultants are reasonably numerous, qualitative ones (such as the author’s doctoral research programme) are far fewer in number. Regarding the UK, Bender (2009, 2011, 2013), Conyon (2006, 2011), Adamson et al (2015), Bender and Franco-Santos (2017) and de Gannes (2018) are arguably the key exemplars. All these studies cover executive remuneration consultants, but Bender and Franco-Santos were the first to cover in-house executive reward specialists in much detail.
