The Taxation of Bonuses and its Effect on Executive Compensation - Evidence from the UK Experience

This paper explores the reaction of compensation components awarded to executive directors of UK financial institutions following the adoption of the bonus tax in December 2009. Excessive bonuses are blamed for encouraging risk taking and are regarded as one of the pull factors of the financial crisis. The British government attempted to reduce bonuses and accordingly corporate risk-taking by means of a special tax on cashbased bonuses. Using a comprehensive dataset on executive compensation we show that the introduction of the bonus tax decreased the net cash bonuses awarded to directors by about 43%, accompanied however by a simultaneous increase in other compensation components leaving both variable as well as total compensation unaffected. Hence, the incidence of the bonus tax was borne by the firms which compensated their managers for the decrease in cash-based compensation by awarding them different forms of pay. Consistent with this finding our data also suggests that firms reduced dividend pay-outs as a consequence of the bonus tax.

The open cut: Mining, transnational corporations and local populations

The rapid expansion of the mineral and metal mining sector in the past decade was accompanied by an increase in social conflicts. What are the impacts of large-scale mining operations? What are the strategies used by transnational corporations to gain access to underground resources and legitimize their activities? And how do local and indigenous communities confronted with mining react to, negotiate with and resist these activities? This book covers 13 case studies of copper, gold, uranium and other mining operations, situated in Latin America, Africa, Asia, Australia and Switzerland. With an extensive introduction to the subject and a systematic comparison across mining operations in different phases of development and social contexts, it serves as a primer and reference book for activists, students and researchers alike.