Are European CEOs paid equally? A study of the UK-continental Europe pay gap

Abstract

We use an extensive dataset that covers eleven western European countries to document a CEO pay gap between the United Kingdom and continental Europe that is larger than the well-documented gap between US and non-US firms, and remains persistent despite the efforts to harmonize corporate governance and pay in Europe. Country analyses show a stronger association between board independence and CEO pay in the UK. They also show a stronger association between ROA and cash payments, and a stronger association between market-to-book and equity-linked compensation, suggesting that closer scrutiny could partly contribute to CEO pay moderation in continental Europe.