Second year economics undergraduate student, Russell Elsdon, will work on the project “Executive Directors’ Biographies” supervised by InstEAD research affiliate Ian Gregory-Smith secured competitive funding from the Sheffield Undergraduate Research Experience (SURE) scheme.
A major gap in the literature on executive compensation concerns the assignment of causality. Does executive pay drive corporate performance, or does corporate performance drive executive pay? Or are both performance and pay are driven by other variables such as human capital? The project will model payments to company directors, the extent to which performance and reward are connected and the accumulation of human capital. The project will undertake a structural approach providing causal estimates relating to executive pay-setting in the UK.