Making Executive Compensation Less Controversial: The Rise of Pay Ratios

This article will discuss the various pay ratio initiatives in the Netherlands, the UK and the US, as well as the new obligation imposed by the European Union on its Member States. It will also address the substantiation that lies at the heart of the introduction of these pay ratios, identify which market failure these regulations are aimed at solving and explain how to give further effect to this obligation. This final section will also discuss and clearly demonstrate that several of those aforementioned initiatives have not been structured effectively.