These ideas are explored in recent papers such as:
"Do Career Shares improve CEO performance? ... more These ideas are explored in recent papers such as:
"Do Career Shares improve CEO performance? Evidence from FTSE 350" by Brian G. M. Main, Rolf Thiess and Vicky Wright in The Journal of General Management, Vol. 36 No. 4 Summer, 2011.
or
"Heads I win, tails you lose? A career analysis of executive pay and corporate performance" by Ian Gregory-Smith and Brian G. M. Main, Cambridge Journal of Economics 2015, Vol. 39, pp. 1373–1398, 2015.
This paper was written as a response to the BIS “Executive Remuneration” discussion paper (BIS, 2... more This paper was written as a response to the BIS “Executive Remuneration” discussion paper (BIS, 2011a) and “The Future of Narrative Reporting” consultation paper (BIS, 2011b). First, we utilise a career perspective to outline the apparent disconnect between executive directors’ pay and company performance. Second, we explain why this disconnect emerges despite the fact that current contracts specify a very high proportion of ‘at-risk’ remuneration for directors in the form of bonuses, share options and long-term equity-based incentives. Last, we propose two items for reform that we believe will improve the efficiency of executive director remuneration: a) that companies report the total remuneration realised to date by each director, juxtaposed against the change in shareholder wealth over the same period; and b) that ‘at-risk’ remuneration is delivered through the vehicle of “career shares” which vest on, or after, the date that a director exits the company.
This paper uses archival board data to demonstrate that women who take positions as directors of ... more This paper uses archival board data to demonstrate that women who take positions as directors of UK companies have shorter tenures than their male counterparts. The authors show that female directors face a much higher risk of dismissal as they approach nine years of service on the board, when their long service deprives them of the all-important classification as 'independent'. At this point, their position on the board becomes precarious. Male directors do not suffer the same increase in boardroom exit. This genderspecific difference is clearly shown to be linked to the independence status. It is argued that these observations are consistent with the notion that female directors are being used in the symbolic management of corporate governance and that, at nine years, when the cloak of independence disappears, women directors are then exposed to the biases that arise from role congruity issues.
ABSTRACT This paper presents estimates for the employer plant size-wage gap for Britain. Using an... more ABSTRACT This paper presents estimates for the employer plant size-wage gap for Britain. Using an ordered probit model, selectivity-corrected wage equations are estimated for three plant size categories. In a comparison between plants with more than 500 workers and those with less than 100, a wage gap estimate of over 17 percent is detected. The wage effects of unionization in plants with more than 500 workers is reported as insignificant. In contrast to evidence provided by T. L. Idson and D. J. Feaster (1990) for the United States, no evidence of nonrandom sorting of workers across plant size is detected. Copyright 1993 by The London School of Economics and Political Science.
BRIAN GM MAIN and BARRY REILLY Department of Economics, University of Edinburgh, UK and School of... more BRIAN GM MAIN and BARRY REILLY Department of Economics, University of Edinburgh, UK and School of Social Sciences, University of Sussex, UK.
This paper offers a technical exploration of the empirical ramifications of adopting the Career S... more This paper offers a technical exploration of the empirical ramifications of adopting the Career Shares approach to long term incentives-a proposal that has emerged from the discussion of the structure of incentive pay in the light of the recent financial crisis. By simulating the impact of such a design of long term incentives in the context of those FTSE350 CEOs whose careers terminated between 1993 and 2008, it is shown that Career Shares automatically introduce a 'settling-up' effect that adjusts for late-career or post-career periods of poor performance. The adoption of such an arrangement would require Remuneration Committees to adjust the overall remuneration package in the light of tax and risk bearing consequences that result. This paper offers the first attempt to confront an interesting and promising new idea (Career Shares) with empirical data that reflects the actual careers followed by a group of CEOs.
The paper examines political and charitable donations among FTSE350 companies over a period spann... more The paper examines political and charitable donations among FTSE350 companies over a period spanning 1996 through 2010. A wide range of measures is drawn on to explain the observed variation in behaviour. In addition to measures of company size, industry, FTSE sector and performance, detail of each company’s governance and of the age and gender of the boardroom executives is included. The unique contribution of the paper is to make use of the observed level of executive remuneration. If this is taken as an indicator of managerial power, it is demonstrated that there is statistical support for the argument that political and charitable donations are utilised, to some extent, as camouflage for high executive pay. The results underline the importance of institutional considerations in the standard agency theory and managerial power perspectives, and point to a social theory of agency. The originality of the paper lies in bringing together the two literatures of corporate giving and exe...
When I took over some six years ago as Director of the David Hume Institute my immediate predeces... more When I took over some six years ago as Director of the David Hume Institute my immediate predecessor was Professor Brian Main of Edinburgh University. Brian was very generous with his time and wise counsel as I felt my way into this new position-and subsequently he has kept in close touch with the Institute and frequently provided advice on a range of matters, including access to his excellent network of academic contacts. Also, throughout the last few years, we have been strongly supported by the Economic and Social Research Council. The ESRC find the Institute to be a valuable partner in helping to disseminate research findings to a broad Scottish audience. We are most grateful to them for providing funds for a number of our seminars and publications. In view of these links with both Brian Main and the ESRC I was delighted, as were our Trustees, when asked to arrange a seminar for Brian to present the results of his latest research, funded by the ESRC. We must acknowledge that this funding included an allocation for dissemination. Therefore the seminar on 1 st June 2011 and this paper are both supported by the ESRC. Certainly Professor Main's paper provides ample scope for debate about pay levels, forms of CEO pay, governance systems and the optimum way forward. This paper represents an excellent combination of an important data set well used by an accomplished academic expert in his field and real suggestions for a way forward in an area of interest to many. The Institute is delighted to be publishing the paper and hosting the seminar but as ever I must close by noting that as a charitable body the Institute has no views on the subject. We simply wish to inform constructive and sceptical debate. Jeremy Peat, Director The David Hume Institute Executive Pay-a career perspective.
This note reports findings relating to three issues raised in the recent FRC Consultation on Dire... more This note reports findings relating to three issues raised in the recent FRC Consultation on Directors’ Remuneration. First, in terms of the scope for claw-back we demonstrate that for those companies where the executive leaves the company worse off than when they started their boardroom position, the bonus and long-term incentive pay-outs realised in the final three years of service amounted to some 38% of total reward earned during their time on the board. As such, the scope for claw-back serving as a deterrent is significant. Second, we show that, not withstanding concerns expressed by many commentators, the practice of serving executives sitting on the remuneration committees of other large companies leads to no significant measurable impact on the level of pay at thos e companies on whose remuneration committees they serve. This finding holds both in terms of awa rded pay and in terms of realised pay. Nor is there any discernible impact on the design of reward arrangements, as ...
COVID-19 and Development: Lessons from Historical Pandemics
SSRN Electronic Journal
Disease does not only affect development through its contemporaneous impact on health, but also t... more Disease does not only affect development through its contemporaneous impact on health, but also through its enduring historical effect through its shaping of culture and institutions. By drawing on the experience of historical pandemics, we argue that some of the current stringent approaches adopted in combating COVID-19 come at the expense of social capital (trust) and institutions (checks on government power), which hold back long-run development. We review the evidence that the Black Death intensified witchcraft beliefs and antisemitism, which, in turn, developed mistrust and exerted an adverse influence on present-day development. Finally, we demonstrate that institutions and culture have greater explanatory power in terms of cross-country infection rates and fatality rates than does health care quality.
This paper offers a technical exploration of the empirical ramifications of adopting the Career S... more This paper offers a technical exploration of the empirical ramifications of adopting the Career Shares approach to long term incentives-a proposal that has emerged from the discussion of the structure of incentive pay in the light of the recent financial crisis. By simulating the impact of such a design of long term incentives in the context of those FTSE350 CEOs whose careers terminated between 1993 and 2008, it is shown that Career Shares automatically introduce a 'settling-up' effect that adjusts for late-career or post-career periods of poor performance. The adoption of such an arrangement would require Remuneration Committees to adjust the overall remuneration package in the light of tax and risk bearing consequences that result. This paper offers the first attempt to confront an interesting and promising new idea (Career Shares) with empirical data that reflects the actual careers followed by a group of CEOs.
These ideas are explored in recent papers such as:
"Do Career Shares improve CEO performance? ... more These ideas are explored in recent papers such as:
"Do Career Shares improve CEO performance? Evidence from FTSE 350" by Brian G. M. Main, Rolf Thiess and Vicky Wright in The Journal of General Management, Vol. 36 No. 4 Summer, 2011.
or
"Heads I win, tails you lose? A career analysis of executive pay and corporate performance" by Ian Gregory-Smith and Brian G. M. Main, Cambridge Journal of Economics 2015, Vol. 39, pp. 1373–1398, 2015.
This paper was written as a response to the BIS “Executive Remuneration” discussion paper (BIS, 2... more This paper was written as a response to the BIS “Executive Remuneration” discussion paper (BIS, 2011a) and “The Future of Narrative Reporting” consultation paper (BIS, 2011b). First, we utilise a career perspective to outline the apparent disconnect between executive directors’ pay and company performance. Second, we explain why this disconnect emerges despite the fact that current contracts specify a very high proportion of ‘at-risk’ remuneration for directors in the form of bonuses, share options and long-term equity-based incentives. Last, we propose two items for reform that we believe will improve the efficiency of executive director remuneration: a) that companies report the total remuneration realised to date by each director, juxtaposed against the change in shareholder wealth over the same period; and b) that ‘at-risk’ remuneration is delivered through the vehicle of “career shares” which vest on, or after, the date that a director exits the company.
This paper uses archival board data to demonstrate that women who take positions as directors of ... more This paper uses archival board data to demonstrate that women who take positions as directors of UK companies have shorter tenures than their male counterparts. The authors show that female directors face a much higher risk of dismissal as they approach nine years of service on the board, when their long service deprives them of the all-important classification as 'independent'. At this point, their position on the board becomes precarious. Male directors do not suffer the same increase in boardroom exit. This genderspecific difference is clearly shown to be linked to the independence status. It is argued that these observations are consistent with the notion that female directors are being used in the symbolic management of corporate governance and that, at nine years, when the cloak of independence disappears, women directors are then exposed to the biases that arise from role congruity issues.
ABSTRACT This paper presents estimates for the employer plant size-wage gap for Britain. Using an... more ABSTRACT This paper presents estimates for the employer plant size-wage gap for Britain. Using an ordered probit model, selectivity-corrected wage equations are estimated for three plant size categories. In a comparison between plants with more than 500 workers and those with less than 100, a wage gap estimate of over 17 percent is detected. The wage effects of unionization in plants with more than 500 workers is reported as insignificant. In contrast to evidence provided by T. L. Idson and D. J. Feaster (1990) for the United States, no evidence of nonrandom sorting of workers across plant size is detected. Copyright 1993 by The London School of Economics and Political Science.
BRIAN GM MAIN and BARRY REILLY Department of Economics, University of Edinburgh, UK and School of... more BRIAN GM MAIN and BARRY REILLY Department of Economics, University of Edinburgh, UK and School of Social Sciences, University of Sussex, UK.
This paper offers a technical exploration of the empirical ramifications of adopting the Career S... more This paper offers a technical exploration of the empirical ramifications of adopting the Career Shares approach to long term incentives-a proposal that has emerged from the discussion of the structure of incentive pay in the light of the recent financial crisis. By simulating the impact of such a design of long term incentives in the context of those FTSE350 CEOs whose careers terminated between 1993 and 2008, it is shown that Career Shares automatically introduce a 'settling-up' effect that adjusts for late-career or post-career periods of poor performance. The adoption of such an arrangement would require Remuneration Committees to adjust the overall remuneration package in the light of tax and risk bearing consequences that result. This paper offers the first attempt to confront an interesting and promising new idea (Career Shares) with empirical data that reflects the actual careers followed by a group of CEOs.
The paper examines political and charitable donations among FTSE350 companies over a period spann... more The paper examines political and charitable donations among FTSE350 companies over a period spanning 1996 through 2010. A wide range of measures is drawn on to explain the observed variation in behaviour. In addition to measures of company size, industry, FTSE sector and performance, detail of each company’s governance and of the age and gender of the boardroom executives is included. The unique contribution of the paper is to make use of the observed level of executive remuneration. If this is taken as an indicator of managerial power, it is demonstrated that there is statistical support for the argument that political and charitable donations are utilised, to some extent, as camouflage for high executive pay. The results underline the importance of institutional considerations in the standard agency theory and managerial power perspectives, and point to a social theory of agency. The originality of the paper lies in bringing together the two literatures of corporate giving and exe...
When I took over some six years ago as Director of the David Hume Institute my immediate predeces... more When I took over some six years ago as Director of the David Hume Institute my immediate predecessor was Professor Brian Main of Edinburgh University. Brian was very generous with his time and wise counsel as I felt my way into this new position-and subsequently he has kept in close touch with the Institute and frequently provided advice on a range of matters, including access to his excellent network of academic contacts. Also, throughout the last few years, we have been strongly supported by the Economic and Social Research Council. The ESRC find the Institute to be a valuable partner in helping to disseminate research findings to a broad Scottish audience. We are most grateful to them for providing funds for a number of our seminars and publications. In view of these links with both Brian Main and the ESRC I was delighted, as were our Trustees, when asked to arrange a seminar for Brian to present the results of his latest research, funded by the ESRC. We must acknowledge that this funding included an allocation for dissemination. Therefore the seminar on 1 st June 2011 and this paper are both supported by the ESRC. Certainly Professor Main's paper provides ample scope for debate about pay levels, forms of CEO pay, governance systems and the optimum way forward. This paper represents an excellent combination of an important data set well used by an accomplished academic expert in his field and real suggestions for a way forward in an area of interest to many. The Institute is delighted to be publishing the paper and hosting the seminar but as ever I must close by noting that as a charitable body the Institute has no views on the subject. We simply wish to inform constructive and sceptical debate. Jeremy Peat, Director The David Hume Institute Executive Pay-a career perspective.
This note reports findings relating to three issues raised in the recent FRC Consultation on Dire... more This note reports findings relating to three issues raised in the recent FRC Consultation on Directors’ Remuneration. First, in terms of the scope for claw-back we demonstrate that for those companies where the executive leaves the company worse off than when they started their boardroom position, the bonus and long-term incentive pay-outs realised in the final three years of service amounted to some 38% of total reward earned during their time on the board. As such, the scope for claw-back serving as a deterrent is significant. Second, we show that, not withstanding concerns expressed by many commentators, the practice of serving executives sitting on the remuneration committees of other large companies leads to no significant measurable impact on the level of pay at thos e companies on whose remuneration committees they serve. This finding holds both in terms of awa rded pay and in terms of realised pay. Nor is there any discernible impact on the design of reward arrangements, as ...
COVID-19 and Development: Lessons from Historical Pandemics
SSRN Electronic Journal
Disease does not only affect development through its contemporaneous impact on health, but also t... more Disease does not only affect development through its contemporaneous impact on health, but also through its enduring historical effect through its shaping of culture and institutions. By drawing on the experience of historical pandemics, we argue that some of the current stringent approaches adopted in combating COVID-19 come at the expense of social capital (trust) and institutions (checks on government power), which hold back long-run development. We review the evidence that the Black Death intensified witchcraft beliefs and antisemitism, which, in turn, developed mistrust and exerted an adverse influence on present-day development. Finally, we demonstrate that institutions and culture have greater explanatory power in terms of cross-country infection rates and fatality rates than does health care quality.
This paper offers a technical exploration of the empirical ramifications of adopting the Career S... more This paper offers a technical exploration of the empirical ramifications of adopting the Career Shares approach to long term incentives-a proposal that has emerged from the discussion of the structure of incentive pay in the light of the recent financial crisis. By simulating the impact of such a design of long term incentives in the context of those FTSE350 CEOs whose careers terminated between 1993 and 2008, it is shown that Career Shares automatically introduce a 'settling-up' effect that adjusts for late-career or post-career periods of poor performance. The adoption of such an arrangement would require Remuneration Committees to adjust the overall remuneration package in the light of tax and risk bearing consequences that result. This paper offers the first attempt to confront an interesting and promising new idea (Career Shares) with empirical data that reflects the actual careers followed by a group of CEOs.
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Videos by Brian Main
"Do Career Shares improve CEO performance? Evidence from FTSE 350" by Brian G. M. Main, Rolf Thiess and Vicky Wright in The Journal of General Management, Vol. 36 No. 4 Summer, 2011.
or
"Heads I win, tails you lose? A career analysis of executive pay and corporate performance" by Ian Gregory-Smith and Brian G. M. Main, Cambridge Journal of Economics 2015, Vol. 39, pp. 1373–1398, 2015.
Papers by Brian Main
"Do Career Shares improve CEO performance? Evidence from FTSE 350" by Brian G. M. Main, Rolf Thiess and Vicky Wright in The Journal of General Management, Vol. 36 No. 4 Summer, 2011.
or
"Heads I win, tails you lose? A career analysis of executive pay and corporate performance" by Ian Gregory-Smith and Brian G. M. Main, Cambridge Journal of Economics 2015, Vol. 39, pp. 1373–1398, 2015.