Executive pay dispersion, corporate governance, and firm performance

2007 ◽  
Vol 30 (3) ◽  
pp. 315-338 ◽  
Author(s):  
Kin Wai Lee ◽  
Baruch Lev ◽  
Gillian Hian Heng Yeo
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Executive Pay ◽  
Pay Dispersion

Pay-performance sensitivity and corporate governance mechanisms: evidence from Tunisia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Meriem Ghrab ◽  
Marjène Gana ◽  
Mejda Dakhlaoui
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Pay For Performance ◽  
Simultaneous Equation ◽  
Executive Pay ◽  
Estimation Model ◽  
Content Type ◽  
Explanatory Variables ◽  
Performance Sensitivity ◽  
Ceo Pay

Purpose The purpose of this study is to analyze the CEO compensation sensitivity to firm performance, termed as the pay-for-performance sensitivity (PPS) in the Tunisian context and to test the robustness of this relationship when corporate governance (CG) mechanisms are considered. Design/methodology/approach The consideration of past executive pay as one of the explanatory variables makes this estimation model a dynamic one. Furthermore, to avoid the problem of endogeneity, this study uses the system-GMM estimator developed by Blundell and Bond (1998). For robustness check, this study aims to use a simultaneous equation approach (three-stage least squares [3SLS]) to estimate the link between performance and CEO pay with a set of CG mechanisms to control for possible simultaneous interdependencies. Findings Using a sample of 336 firm-years from Tunisia over the 2009–2015 periods, this study finds strong evidence that the pay-performance relationship is insignificant and negative, and it becomes more negative or remains insignificant after introducing CG mechanisms consistently with the managerial power approach. The findings are robust to the use of alternative performance measures. This study provides new empirical evidence that CEOs of Tunisian firms abuse extracting rents independently of firm performance. Originality/value This study contributes to the unexamined research on PPS in a frontier market. This study also shows the ineffectiveness of the Tunisian CG structure and thus recommends for the legislator to impose a mandatory CG guide.

scholarly journals Corporate governance and theories of executive pay

2003 ◽  
Vol 1 (2) ◽  
pp. 94-105 ◽  
Author(s):  
Kuntara Pukthuanthong ◽  
Eli Talmor ◽  
James S. Wallace
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Ceo Compensation ◽  
Pay For Performance ◽  
Task Complexity ◽  
Stock Ownership ◽  
Executive Pay ◽  
The U.S ◽  
And Task

This study performs an in-depth look at the corporate governance, voting and ownership structure of the companies selected using a relatively homogenous data of the U.S. financial sector. Variables that proxy for managerial strategic discretion and task complexity are found to best explain CEO compensation. Corporate governance, including board characteristics and ownership structure, is the second leading determinant of pay variation, while firm performance and CEO specific characteristics seem to play the least role. In accord with studies on managerial stock ownership and Tobin’s Q, the pay-for-performance relation appears to be curvilinear in CEO stock ownership

scholarly journals Corporate governance, firm performance and executive pay: A comparison of defense and non-defense firms

2019 ◽  
Vol 3 (2) ◽  
pp. 8-17 ◽  
Author(s):  
Bertrand Lemennicier ◽  
Joël Hermet ◽  
Duraisamy Palanigounder
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Governance Structure ◽  
Ordinary Least Squares ◽  
Executive Pay ◽  
Return On Assets ◽  
Restricted Stock ◽  
Econometric Methodology ◽  
The Difference ◽  
Defense Firms

This study analyses pay-performance relationship and pay structure of executives and tests whether the pay structure of CEOs differs across firms in the defense and non-defense sector using econometric methodology. The empirical results based on ordinary least squares, Probit and Tobit methods show that on an average, executives in the defense firms earn more than their counterparts in the non-defense sector. However, when we control for governance structure, firm performance and other characteristics, the difference in executives’ remuneration vanishes. The important determinants of executive pay are the legal system, firm performance measured by Return on Assets (ROA), whether the CEO is also Chairman of the board, and size of the firm. The estimates of the determinants of restricted stock awards showed that firm performance, governance and other characteristics significantly influence the likelihood of obtaining restricted stock awards and also the value of the stock award.

Corporate Governance Ratings and Firm Performance

CFA Digest ◽  
2009 ◽  
Vol 39 (4) ◽  
pp. 16-18
Author(s):  
Frank T. Magiera
Keyword(s):  
Corporate Governance ◽  
Firm Performance

CEO Compensation and Acquired and Acquiring Companies in Large Corporate Acquisitions

GIS Business ◽  
2016 ◽  
Vol 11 (5) ◽  
pp. 01-13
Author(s):  
Simon Yang
Keyword(s):  
Firm Performance ◽  
Executive Compensation ◽  
Ceo Compensation ◽  
Relative Sensitivity ◽  
Matched Sample ◽  
Executive Pay ◽  
Corporate Acquisitions ◽  
Acquiring Firms ◽  
Managerial Power ◽  
To Receive

This paper examines the relative sensitivity of CEO compensation of both acquiring and acquired firms in the top 30 U.S. largest corporate acquisitions in each year for the period of 2003 to 2012. We find that total compensation and bonus granted to executive compensation for acquired companies, not acquiring companies, are significantly related to the amount of acquisition deal even after the size and firm performance are controlled for. Both acquiring and acquired CEOs are found to make the significantly higher compensation than the matched sample firms in the same industry and calendar year. We also find that executives with higher managerial power, as measured by a lower salary-based compensation mix, prior to a corporate acquisition are more likely to receive a higher executive pay in the year of acquisition. The association between executive compensation and managerial power seems to be stronger for acquired firms than for acquiring firms in corporate acquisition. Overall, our findings suggest that corporate acquisition has higher impacts on executive compensation for acquired firm CEOs than for acquiring firm CEOs.

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