Pay Comparisons: An Analysis of UK University Vice Chancellors Pay Awards

H. Tarbert, Kai-Hong Tee, R. Watson

    Research output: Working paper

    Abstract

    This paper examines UK University Vice Chancellors (VC) pay awards. The empirical analysis, covering the period 1997 to 2002, evaluates the impact upon VC pay awards of university performance measures, an internal pay comparison measure and two external pay comparisons, i.e., the pay of other VCs and the pay of CEOs leading comparable-sized UK firms. We find no evidence that VC pay awards are related to any of the performance measures, though the positive relationship found between changes in the proportion of other highly-paid employees and VC pay awards suggests that internal pay comparisons play an important role in remuneration committee decision making. Of the two external pay benchmarks, the pay received by other VCs has the largest positive impact upon VC pay awards. Nevertheless, the (much smaller) partial adjustment of VC pay explained by the difference between the two external pay benchmarks was also statistically significant. Thus, whilst average VC pay increased by some 40% over the period, this was significantly less than the increase in the pay of comparable UK CEOs. We suggest that this conservatism by university remuneration committees stems largely from political rather than financial constraints.
    Original languageEnglish
    PublisherUniversity of Aberdeen Business School
    Number of pages38
    Publication statusPublished - Apr 2007

    Publication series

    NameUniversity of Aberdeen Business School Working Paper Series
    No.20
    Volume2007
    ISSN (Print)0143-4543

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  • Cite this

    Tarbert, H., Tee, K-H., & Watson, R. (2007). Pay Comparisons: An Analysis of UK University Vice Chancellors Pay Awards. (University of Aberdeen Business School Working Paper Series; Vol. 2007, No. 20). University of Aberdeen Business School. http://hdl.handle.net/2164/136