The Incentive Structure of Executive Compensation

2012 ◽  
pp. 45-65
Author(s):  
Robert W. Kolb
Keyword(s):  
Executive Compensation ◽  
Incentive Structure

Tracing the links between executive compensation structure and firm performance: evidence from the Brazilian market

2020 ◽  
Vol 20 (7) ◽  
pp. 1393-1408
Author(s):  
Alexandre Dias ◽  
Victor Vieira ◽  
Bruno Figlioli
Keyword(s):  
Firm Performance ◽  
Executive Compensation ◽  
Performance Indicators ◽  
Multiple Correspondence Analysis ◽  
Emerging Market ◽  
Negative Relationship ◽  
Governance Mechanism ◽  
Incentive Structure ◽  
Content Type ◽  
Compensation Structure

Purpose This study aims to investigate how different executive compensation structures were related to the performance of firms. Design/methodology/approach This study was based on a sample of companies with the highest standards of corporate governance listed on the Brazilian Stock Exchange. We adopted the multiple correspondence analysis followed by the hierarchical cluster analysis to propose a typology defined by fixed and variable components of the executive compensation and multiple firm performance indicators. Findings The analysis produced three clusters, which were submitted to robustness tests, highlighting that companies used the compensatory incentives in striking distinct ways as governance mechanisms. The study found a positive relationship between the performance of companies and the variable incentives of executive compensation, especially the long-term incentive, as well as a negative relationship between the performance of firms and the fixed component of the compensation structure. Research limitations/implications This research, whose sample was based on an emerging market, adds empirical evidence to the literature. However, future studies are invited to address the relationships between executive compensation structures and firm performance in other markets, as well as to examine these relationships in companies with distinct levels of governance. Practical implications This study provides insights on how the incentive structure can be adopted as an efficient governance mechanism, especially for companies in emerging markets. Originality/value The main novelty of this paper is that the methodological strategy used here enabled the authors to discriminate distinct executive compensation structures and establish a relationship between these compensation structures and different types of performance indicators.

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.

ANALISIS FAKTOR PENENTU KOMPENSASI EKSEKUTIF DAN HUBUNGAN KOMPENSASI EKSEKUTIF DENGAN KINERJA PERUSAHAAN

2013 ◽  
Vol 11 (3) ◽  
Author(s):  
Dyan Vidyatmoko ◽  
Bunasor Sanim ◽  
Hermanto Siregar ◽  
M. Said Didu
Keyword(s):  
Financial Performance ◽  
Executive Compensation ◽  
Structural Equation ◽  
Equation Model ◽  
Product Diversification ◽  
Learning Performance ◽  
Market Area ◽  
Job Complexity ◽  
Positive Correlation ◽  
Volume Output

The objectives of this research were (1) to analyse determinants of the influencing factors of the Indonesian Estate State-owned enterprises’ executive compensations; and (2) to analyse the relationship between compensation executive and firm performances. Statistical methods used for analysing these objectives were Structural Equation Model (SEM), contingency analysis, regresion analysis and qualitative analysis. The study found out that from all identified variables, executive decision mechanism, job complexity, firm size, firm ability to pay compensation, and product diversification and market expansionhad positive correlation and significant influenced to executive compensation. Human capital, business risk, executive employment market had significant correlations to executive compensation. The research had also shown a result that executive compensation provide positive correlation and significant influence towards financial performance (EBIT), customer performance (sales volume, output price, market area), internal process performance (OER target, OER realisation), and growth and learning performance (number of training investment, number of employees participated intraining). However, executive compensation did not give positive correlation and significant influenced towards financial performance (ROE) and customer performance(market share). This research also showed that direction of executive compensation was heading to company’s performance and not the opposite way.

Executive Compensation: New vs. Old Economy and the Impact of NASDAQ Crash and Sarbanes Oxley Act

2008 ◽  
Author(s):  
João Paulo Vieito ◽  
Antonio Melo Cerqueira ◽  
Elísio Brandão ◽  
Walayet A. Khan
Keyword(s):  
Executive Compensation ◽  
Sarbanes Oxley ◽  
Old Economy ◽  
The Impact
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