Comparative analysis of determinants of executive remuneration in the UK financial services sector

This paper analyses the determinants of executive remuneration in the UK financial services sector. For this purpose, the determinants of executive remuneration of demutualized societies are compared with those of building societies, which have retained their mutual status, traditional retail banks, and their pre-demutualization positions. The results show that the determinants of remuneration differ in the UK mutual and plc organizational forms, and that the role of the determinants changed after demutualization. In particular, the relationships between remuneration and size disappeared after demutualization. The results also imply that remuneration committees use only industry norms to attract and retain executives irrespective of performance.