Although there are many studies on executive compensation, many of these studies often take for granted the 'Anglo-American style of corporate governance'. This paper seeks to contrast the effect of corporate governance on the directors' incentive, by comparing the UK and Japan. There is a positive and significant relationship between directors' pay and employees' average wage in Japan, suggesting that both directors and employees have a similar incentive system while no such relationship is observed in the UK. These results suggest that the difference in corporate governance affects the director's salary and their incentives.
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Paper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number
2001-2.
Find related papers by JEL classification: G30 - Financial Economics - - Corporate Finance and Governance - - - General J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General M10 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - General
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