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Title: Executive incomes and shareholdings, business motivation and company performance : a study of U.K. companies, 1969-73
Author: Cosh, Andrew Duncan
ISNI:       0000 0001 2449 789X
Awarding Body: University of Cambridge
Current Institution: University of Cambridge
Date of Award: 1978
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Abstract:
This study concentrates on the implications of the separation of ownership from control, associated with the dispersion of share ownership, for business motivation and company performance. The first part of the study examines the determinants of executive remuneration in the United Kingdom. This is an important subject in its own right but has acquired special significance in relation to managerial theories of the firm which used evidence showing that executive incomes were related to company size but not to profitability in formulating their views on business motivation. There are several reasons why such a study was needed at this time: first, information on executive remuneration had only recently become available for UK companies and this was the first study to use this information; second, the data was sufficiently comprehensive, covering well over one thousand UK quoted companies, to permit, for the first time, a consideration of inter-industry and inter-size-class differences in the structure of executive remuneration; and third, a recent study of executive incomes in US companies had cast doubt on the findings of earlier work. The results obtained suggest that the fixed remuneration (i.e. non stock based income) of executives, particularly in large companies, provides little incentive for the pursuit of increased profitability. The second part of the study investigates the value of shareholdings and stock income of executives in three industries drawn from the original sample. This study shows that it would be wrong to regard the executives of most companies as being 'propertyless' and that, in several companies, the stock income of executives forms a significant proportion of their total remuneration (i.e. fixed stock income). The impact on the earlier results of the use of this wider definition of executive remuneration is examined and it is found that profitability is a more important determinant of total executive remuneration than it was of fixed executive remuneration. The implications of these results for the theory of the firm are discussed. Finally, the information concerning executives' incomes and shareholdings is used to distinguish between management-controlled firms and owner-controlled firms. This information is then used to investigate both the extent of the divorce of ownership from control and, using multivariate discriminant analysis, its impact on company performance.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.598010  DOI: Not available
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