The politics of top executive compensation in advanced democracies

Abstract

Since the 1980s, advanced democracies have experienced CEO pay scandals at an accelerating rate. However, this course varied across countries. Existing theories come short in explaining why some democracies experienced more frequently scandals involving overcompensation of the CEOs in core industries. Further, most studies are based on the US political and corporate system, which differ from European democracies. This is problematic as these are currently the only studies we rely on when it comes to public policy making. I develop an argument, based on a critical review, on why we need more political science studies on the different policies on CEO pay. This direction of research may more accurately tackle questions such as why some democracies meet obstacles for CEO pay reforms, more than others.