Advanced

Transparency of Executive Directors'' Remuneration

Hagelborn, Sara and Lassesson, Ida-Karolina (2009)
Department of Business Administration
Abstract
Following rising remuneration levels, significant owner reactions to excessive executive pay, and a request for more executive accountability, there has been increased focus on disclosure of more complete information on the pay levels, program structure and performance criteria for key executives in most European markets. In general, the academic research in the area has been about the conformance of disclosure with different regulations and recommendations, and several comparative studies have been made. But after thorough investigation, nothing has been found on the demand of information. Therefore, this study has analyzed how transparent the reporting of executive directors’ remuneration is in Swedish listed companies, by examining to... (More)
Following rising remuneration levels, significant owner reactions to excessive executive pay, and a request for more executive accountability, there has been increased focus on disclosure of more complete information on the pay levels, program structure and performance criteria for key executives in most European markets. In general, the academic research in the area has been about the conformance of disclosure with different regulations and recommendations, and several comparative studies have been made. But after thorough investigation, nothing has been found on the demand of information. Therefore, this study has analyzed how transparent the reporting of executive directors’ remuneration is in Swedish listed companies, by examining to what extent the demand for information is satisfied by the annual reports. The study has been divided into two parts where the first part analyzes the demand for information by compiling the regulations and recommendations, interviewing different stakeholders and reviewing the discussion in media. The demanded variables have then been placed in four different levels of transparency; 1) basic disclosure – contains mandatory information required by the Annual Accounts Act, 2) general disclosure – contains additional information but the nature of the information is still very general, 3) extended disclosure – contains more firm-specific information, 4) full disclosure – contains all variables demanded. The constructed classification system is used in the second study where the annual reports of companies listed on OMX Stockholm Large Cap have been analyzed. The study shows that the market for information on directors’ remuneration is in disequilibrium, caused by a supply deficit, where none of the studied companies fulfill a higher level of transparency than general disclosure. (Less)
Please use this url to cite or link to this publication:
author
Hagelborn, Sara and Lassesson, Ida-Karolina
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
executive directors, remuneration, compensation, disclosure, transparency, Management of enterprises, Företagsledning, management
language
Swedish
id
1437554
date added to LUP
2009-06-04 00:00:00
date last changed
2012-04-02 17:23:53
@misc{1437554,
  abstract     = {Following rising remuneration levels, significant owner reactions to excessive executive pay, and a request for more executive accountability, there has been increased focus on disclosure of more complete information on the pay levels, program structure and performance criteria for key executives in most European markets. In general, the academic research in the area has been about the conformance of disclosure with different regulations and recommendations, and several comparative studies have been made. But after thorough investigation, nothing has been found on the demand of information. Therefore, this study has analyzed how transparent the reporting of executive directors’ remuneration is in Swedish listed companies, by examining to what extent the demand for information is satisfied by the annual reports. The study has been divided into two parts where the first part analyzes the demand for information by compiling the regulations and recommendations, interviewing different stakeholders and reviewing the discussion in media. The demanded variables have then been placed in four different levels of transparency; 1) basic disclosure – contains mandatory information required by the Annual Accounts Act, 2) general disclosure – contains additional information but the nature of the information is still very general, 3) extended disclosure – contains more firm-specific information, 4) full disclosure – contains all variables demanded. The constructed classification system is used in the second study where the annual reports of companies listed on OMX Stockholm Large Cap have been analyzed. The study shows that the market for information on directors’ remuneration is in disequilibrium, caused by a supply deficit, where none of the studied companies fulfill a higher level of transparency than general disclosure.},
  author       = {Hagelborn, Sara and Lassesson, Ida-Karolina},
  keyword      = {executive directors,remuneration,compensation,disclosure,transparency,Management of enterprises,Företagsledning, management},
  language     = {swe},
  note         = {Student Paper},
  title        = {Transparency of Executive Directors'' Remuneration},
  year         = {2009},
}