Abstract
This paper presents the results of our investigation into the operation of the managerial labour market in small and medium sized manufacturing companies. Using a sample of some 40 or so companies we study the sensitivity of managerial pay and tenure to company performance. Managerial pay in this type of firms is much lower than the six digit figures quoted for large public companies and CEO turnover is much higher than we expected. We find some evidence to suggest that pay in small companies is sensitive to sales growth and that CEO tenure in public companies responds to the growth in sales.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Conyon, M. J., 1996, Directors' Pay and Turnover: An Application to a Sample of Large U.K. Firms, University of Warwick, mimeo.
Conyon, M. J. and P. Gregg, 1994, ‘Pay at the Top: A Study of the Sensitivity of Top Director Remuneration to Company Specific Shocks’, National Institute Economic Review 149(3), 83–92.
Conyon, M. J., P. Gregg and S. Machin, 1995, ‘Taking Care of Business: Executive Compensation in the U.K., Economic Journal 105(430), 704–714.
Cosh, A. and A. Hughes, 1995, Executive Remuneration, Executive Dismissal and Institutional Shareholdings, Centre for Business Research, University of Cambridge, Working Paper No. 19.
The Economist, 1995, Vol. 335, London.
Gregg, P., S. Machin and S. Szymanski, 1993, The Compensation of Top Directors of U.K. Companies, University College London, mimeo.
Hart, O., 1995, ‘Corporate Governance: Some Theory and Implications’, Economic Journal 105(430), 678–689.
Jensen, M. and K. Murphy, 1990, ‘Performance Pay and Top Management Incentives’, Journal of Political Economy 98(2), 225–264.
Main, B., 1992, Top Executive Pay and Company Performance, University of Edinburgh, mimeo.
Main, B., 1993, ‘Pay in the Boardroom: Practices and Procedures’, Personnel Review 22, 3–14.
Main, B., A. Bruce and T. Buck, 1996, Total Board Remuneration and Company Performance, University of Edinburgh, mimeo.
Milgrom, P. and J. Roberts, 1992, Economics, Organisation & Management, New Jersey: Prentice-Hall International.
Rosen, S., 1990, Contracts and the Market for Executives, National Bureau for Economic Research Working Paper No. 3542.
Tirole, J., 1988, The Theory of Industrial Organization, Cambridge, MA: MIT Press.
Storey, D., R. Watson and P. Wynarczyk, 1995, ‘The Remuneration of Non-owner Managers in U.K. Unquoted and Unlisted Securities Market Enterprises: An Empirical Analysis of Firm Specific, Human Capital and Job History Influences’, Small Business Economics 7, 1–13.
Warner, J. B., R. L. Watts and K. H. Wruck, 1988, ‘Stock Prices and Top Management Changes’, Journal of Financial Economics 20, 461–492.
Weisbach, M., 1988, ‘Outside Directors and CEO Turnover’, Journal of Financial Economics 20, 431–460.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Conyon, M.J., Nicolitsas, D. Does the Market for Top Executives Work? CEO Pay and Turnover in Small U.K. Companies. Small Business Economics 11, 145–154 (1998). https://doi.org/10.1023/A:1007908520404
Issue Date:
DOI: https://doi.org/10.1023/A:1007908520404