In seven pages this paper assesses the Greenbury Report's effects upon corporate executive salaries in the United Kingdom in a consideration of why they earn so much with suggestions also offered. Ten sources are listed in the bibliography.
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as controversial as many as the executives set the salaries for themselves. Often this may be through boards where it is thought the different executives will support each other ion
order to gain large pay increases, even when a company is not performing to the shareholders expectations. When we consider the trends
of 2001 the salaries are still rising far in excess of the proportional increases in company performance (Heller, 2001). It can also be argued that when the pay scale is
not challenging to the senior management the system, is one that supports mediocre management and low levels of innovation (Heller, 2001). On
average the rise in remuneration packages for executives in 2001 was 28% (Toynbee, 2001), this makes the UK executives some of the highest paid executives in the world, only beaten
by the US (Anonymous, 2001). This is brings the average executive salary to ?509,000. By comparison the this is at least ?100,000 more that their European counterparts, with French executives
averaging ?382,000, Swedish executives averaging ?311,000 and the German executives averaging ?298,000 (Anonymous, 2001). By comparisons across the Atlantic the average figure for executive salary was ?992,974 in 2001 (Anonymous,
2001). The controversy is not new, it has been around for many years, and it was the subject of the Greenbury report. Here
the report does not cry directly for the reduction of executive salaries, but seeks to make them more visible and also for them to act as more powerful incentives for
good management within a company (Shrives and Welch, 1997). However, it also has to be remembered that may aspects of a directors remuneration are less tangible, made up of