Abstract
This article examines UK University Vice Chancellors (VC) pay awards. The
empirical analysis, covering the period 1997–2002, evaluates the impact upon
VC pay awards of university performance measures, internal pay comparisons
and two external pay comparisons, that is, the pay of other VCs and the pay of
chief executive officers (CEOs) leading comparable-sized UK firms. For the
total sample, we find no evidence that VC pay awards are related to any of the
performance measures, although for the pre- and post-1992 subsamples there is
some evidence that pay awards are related to some ‘mission-relevant’ performance
measures. All the analyses show a positive relationship between changes
in the proportion of other highly paid employees and VC pay awards, which
suggests that internal pay comparisons play an important role in remuneration
committee decision making. As anticipated, the two external pay benchmarks
have very different effects upon VC pay awards; the pay received by other VCs
produces a marked ‘mean reversion’ in pay levels while the pay of CEOs running
comparable-sized UK firms had a highly significant positive impact upon VC
pay awards. Following the insights of institutional theory, we interpret this
conservatism by university remuneration committees as stemming primarily
from legitimation concerns rather than financial constraints.
| Original language | English |
|---|---|
| Pages (from-to) | 771-805 |
| Number of pages | 35 |
| Journal | British Journal of Industrial Relations |
| Volume | 46 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 4 Dec 2008 |
| Externally published | Yes |