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Aditi Gupta, Jenny Chu and Xing Ge: Form Over Substance? An Investigation of Recent Remuneration Disclosure Changes in the UK

Published on: 06 Jul 2016

This paper analyses how UK-incorporated FTSE 100 companies have responded to the 2013 changes in UK company law that increased the level of disclosure required in directors' remuneration reports.

The results of the research show that, because the new mandatory disclosure on relative increase in Chief Executive Officer (CEO) and employee pay allows firms to self-select their employee comparator groups, it falls short in addressing concerns about greater transparency in disclosure of wage inequality. Additional voluntary disclosures provided by companies were also more focused on presentation over substantiative content changes.

As a result, the authors question whether the new enhanced disclosure regime is effective in its aim to improve the pay and performance link and curb excessive CEO pay.

The full paper can be obtained free of charge from the Social Science Research Network.

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