Do US Market Interactions Affect CEO Pay? Evidence From UK Companies

This paper examines the extent that interactions with US markets impact the compensation practices of non-US firms. Using a sample of large UK companies, the authors find that the total compensation of UK CEOs is positively related to the extent of the firm's interactions with US markets, as captured by the percentage of total sales generated in the US, the presence of prior US acquisition activity, the presence of a US exchange listing, and CEO and director-level US board experience. More importantly, they find that exposure to US product markets is associated with the adoption of US-style compensation arrangements.