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Tenure, promotion and executive remuneration

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  • James Johnston

Abstract

Commentators frequently remark on the need to pay high levels of chief executive officer remuneration to attract, motivate and retain the best executives for Britain's leading companies. This paper presents the results of an empirical investigation into tenure, promotion and executive remuneration. The remuneration of the chief executive officers at some of Britain's largest businesses is examined. In the majority of cases the CEO had not been lured away from rivals but had risen through the internal labour market, often after a long-term employment relationship. Moreover, long job tenure and internal promotion were associated with higher levels of pay. It is concluded that understanding of this controversial issue will be improved if it is recognized that a part of current executive pay may be a reward for previous successful performance.

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  • James Johnston, 2002. "Tenure, promotion and executive remuneration," Applied Economics, Taylor & Francis Journals, vol. 34(8), pages 993-997.
    • Handle: RePEc:taf:applec:v:34:y:2002:i:8:p:993-997
    DOI: 10.1080/00036840110069967
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    Cited by:

    1. Fernando Núñez & Ángel Arcos-Vargas & Carlos Usabiaga & Pablo Álvarez-de-Toledo, 2022. "On directors’ compensation: a multilevel analysis of Spanish listed companies," Empirical Economics, Springer, vol. 63(4), pages 2173-2207, October.
    2. Sterkens, Philippe & Baert, Stijn & Rooman, Claudia & Derous, Eva, 2021. "Why Making Promotion After a Burnout Is Like Boiling the Ocean," GLO Discussion Paper Series 871, Global Labor Organization (GLO).
    3. Hristos Doucouliagos & Janto Haman & T.D. Stanley, 2012. "Pay for Performance and Corporate Governance Reform," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(3), pages 670-703, July.
    4. Nancy Mohan & John Ruggiero, 2007. "Influence of firm performance and gender on CEO compensation," Applied Economics, Taylor & Francis Journals, vol. 39(9), pages 1107-1113.

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