London School of Economics' Alexander Pepper: The debate around CEO pay rise

'Two rival academic theories'

clock • 4 min read

The leaders of the London Stock Exchange want to have a constructive discussion about the UK's approach to executive compensation.

They believe that UK companies must pay more to compete with US businesses. The counterargument is that the London stock market's unfavourable international competitive position is a consequence of political uncertainty, a confused approach to international trade, a shortage of capital, and the absence of a coherent industrial policy rather than a failure to remunerate top executives at US pay levels. FTSE 100 CEO pay stretches to all-time high So, who is right? Two rival academic theories try to explain the sharp rise in executive compensation in the last forty years. The fi...

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