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Institutional investors and director pay: An empirical study of UK companies

Dong, Min; Ozkan, Aydin


Min Dong

Aydin Ozkan


This paper empirically examines the determinants of director pay for a sample of listed non-financial firms in the UK by focusing on the effects of institutional ownership on both director pay and pay-performance relationship. Our analysis reveals that institutional investors, as a whole, make no appreciable difference in the determination of director pay level and pay-performance relationship. However, after we divide institutions into "dedicated" and "transient" groups. We show that dedicated institutions restrain the level of director pay and strengthen pay-performance link. This is consistent with our expectation that dedicated (long-horizon) institutions are more involved in corporate governance and serve a better monitoring and disciplining role than other short-horizon institutions. © 2007 Elsevier B.V. All rights reserved.


Dong, M., & Ozkan, A. (2008). Institutional investors and director pay: An empirical study of UK companies. Journal of Multinational Financial Management, 18(1), 16-29.

Journal Article Type Article
Acceptance Date Jun 18, 2007
Online Publication Date Jun 28, 2007
Publication Date Feb 1, 2008
Deposit Date Nov 13, 2014
Journal Journal Of Multinational Financial Management
Print ISSN 1042-444X
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 18
Issue 1
Pages 16-29
Keywords Economics and Econometrics; Finance
Public URL
Publisher URL