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This paper examines the impact that interactions with the United States market have on the compensation practices of non-US firms. The authors find strong evidence that the total compensation of UK executives is positively related to the extent of the firm's interaction with the US market, as captured by the percentage of total sales generated in the US, the presence of prior US acquisition activity and the presence of a US exchange listing. Further tests reveal that UK firms with higher levels of US sales utilize greater levels of bonus pay and are more likely to issue option grants, while UK firms listed on a US exchange offer their executives' higher average salaries than their non-listed peers.
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