This article draws on case studies from five of the UK privatized water plcs in order to examine how Remuneration Committees operationalized and justified their executive long-term incentive pay (LTIP) schemes. The article uses these as 'revelatory' examples to illuminate how problematic decisions about executive pay can be. The water plc Remuneration Committees, concerned about potential stakeholder criticism, devoted considerable time and resources to ensure that their choice of LTIP comparators and performance metrics would be regarded as legitimate. The difficulties they encountered in pursuing this illustrate the underlying indeterminacy and incoherence of normative guidelines for implementing good governance in these substantive areas of executive remuneration. The article analyses this in terms of institutional incompleteness and argues that the resulting uncertainty creates theoretical as well as practical issues for resolving debates about what constitutes good governance.
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