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Top Executive Remuneration: a View from Europe

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Original languageEnglish
Pages (from-to)1493-1506
Number of pages14
JournalJournal of Management Studies
Issue number7
Publication statusPublished - Nov 2005


We argue that the dominance of principal-agent theory as an approach to investigating executive pay has led to an overly narrow focus which may be unhelpful when considering cross-country differences and probably also hinders within-country analysis. The paper discusses the interlinked nature of three available theoretical lenses, namely principal-agent, executive power, and stewardship/stakeholder theories. It argues that institutional theory can provide a useful overarching framework within which appropriate variants of these approaches can be deployed to better comprehend developments in executive pay. We illustrate our approach with a discussion of executive pay in the UK and in Germany.

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