Dissertation

Executive Remuneration and Corporate Governance in the Contemporary UK Corporation

Submitted by Varun Pugla

Supervisor: Professor Alistair Bruce

This dissertation is submitted as a part of the requirements for the award of MA in Management

ACK NO W L E D G E M E NT S

This dissertation is a collective effort of many people with different contributions at various times. Firstly, I would like to express my sincere gratitude to my supervisor, Professor Alistair Bruce whose guidance and immense wisdom shaped and enriched the study. I regard myself privileged to have received supervision from him. I would like to take this opportunity to thank him for providing me with detailed suggestions and valuable comments on my work.

I would like to acknowledge my friends and well wishers for their support and encouragement throughout my stay at Nottingham.

I would also like to thank my family for their unwavering belief in me and my abilities. Their thoughtful gestures of care and concern helped me sail through tough times.

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Abstract

Executive remuneration has attracted much attention from investors, financial economists, regulators, the media and the public at large. For the past 20 years the subject of executive remuneration was dominated by stock based compensation. Annual bonuses as a component in executive remuneration were relatively neglected. In the current scenario stock based compensation has started loosing its importance due to complexities involved and slow progress in stock markets. Companies have now started focusing more on annual bonuses as an incentive pay. This paper provides an overview of annual bonus landscape and corporate governance practices in the UK. An attempt has been made to address the issues related to annual bonuses and fill the gap which has existed for a long time in the studies related to executive remuneration. This paper uses FTSE 100 index to examine the level of transparency adopted by the companies. A sample...