Mapping the determinants of carbon-related CEO compensation: a multilevel approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Julija Winschel
Keyword(s):  
Climate Change ◽  
Corporate Governance ◽  
Ceo Compensation ◽  
Behavioral Science ◽  
Theoretical Perspective ◽  
Chief Executive ◽  
Content Type ◽  
Change Impact ◽  
Research Propositions

Purpose In view of the current climate change emergency and the growing importance of the climate-related accountability of companies, this paper aims to advance a comprehensive understanding of the determinants of carbon-related chief executive officer (CEO) compensation. Design/methodology/approach Building on the agency-theoretical perspective on executive compensation and existing work in the fields of management, corporate governance, cultural studies, and behavioral science, this paper derives a multilevel framework of the determinants of carbon-related CEO compensation. Findings This paper maps the determinants of carbon-related CEO compensation at the societal, organizational, group, and individual levels of analysis. It also provides research propositions on the determinants that can support and challenge the implementation of this instrument of environmental corporate governance. Originality/value In the past literature, the determinants of carbon-related CEO compensation have remained largely unexplored. This paper contributes to the academic discussion on environmental corporate governance by showcasing the role of interlinkages among the determinants of carbon-related CEO compensation and the possible countervailing impacts. In view of the complex interdisciplinary nature of climate change impact, this paper encourages businesses practitioners and regulators to intensify their climate change mitigation efforts and delineates the levers at their disposal.

Climate change policies and carbon-related CEO compensation systems: an exploratory study of European companies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Julija Winschel
Keyword(s):  
Climate Change ◽  
Ceo Compensation ◽  
Theoretical Perspective ◽  
Chief Executive ◽  
Time Frame ◽  
Business Practice ◽  
Short Term ◽  
Content Type ◽  
Climate Change Policies ◽  
Compensation Systems

Purpose In view of current climate change policies, this study aims to provide researchers, regulators, and business practice with the current picture of practices regarding carbon-related compensation granted to chief executive officers (CEO). To this end, it examines whether and to what extent European companies translate their carbon reduction strategies into carbon targets underlying their CEOs’ short-term and long-term compensation, what characteristics the carbon targets used commonly have in terms of their quality and time frame, and whether the carbon targets used differ among carbon-intensive, and less carbon-intensive companies. Design/methodology/approach Drawing on the stakeholder-agency theoretical perspective, this study explores the patterns of use and characteristics of carbon-related targets in CEO compensation. In this vein, a content analysis of corporate disclosure for the business years 2018 and 2019 is conducted for a European sample of 65 large listed companies from 16 countries and 11 industries. Findings The findings of this study show that albeit the trend toward new adoption, carbon-related CEO compensation systems are still uncommon. The results also reveal that carbon targets are mainly used to determine short-term compensation. Further, the findings highlight that carbon-related CEO compensation is almost equally widespread among carbon-intensive and less carbon-intensive companies. However, in terms of target quality, the study shows that carbon-intensive companies display greater heterogeneity and opacity. Originality/value By analyzing the characteristics of carbon targets and the prevalence of carbon-related CEO compensation for the first time, this study contributes to the stakeholder-agency theoretical perspective on corporate governance. In view of the European Green Deal and climate-related stakeholder demands, regulators and business practice are encouraged to recognize that carbon-related CEO compensation should gain momentum and the disclosure on this matter should become more transparent and comparable among companies and across industries.

scholarly journals Can compensation committees effectively mitigate the CEO horizon problem? The role of co-opted directors

2020 ◽  
Vol 34 (1) ◽  
pp. 1-21
Author(s):  
Ruonan Liu
Keyword(s):  
Corporate Governance ◽  
Research And Development ◽  
Empirical Evidence ◽  
Design Methodology ◽  
Ceo Compensation ◽  
Content Type ◽  
Horizon Problem ◽  
Accruals Management ◽  
Compensation Committees

Purpose This study aims to examine whether compensation committees dominated by co-opted directors are less effective in mitigating the CEO horizon problem. Design/methodology/approach The author uses a sample of 7,280 firm-year observations from 1998 to 2011. Findings In this study, the author finds evidence of opportunistic research and development (R&D) reduction and accruals management in firms with retiring CEOs and compensation committees dominated by co-opted directors. Moreover, it is found that R&D reduction and income-increasing accruals are less discouraged when determining the compensation for retiring CEOs by compensation committees that are dominated by co-opted directors. The results suggest that compensation committees dominated by co-opted directors are less effective in adjusting CEO compensation to mitigate the CEO horizon problem. Originality/value The study reveals that co-opted directors are weak monitors. Moreover, the study adds empirical evidence to the debate of organizations’ CEO horizon problem. Finally, the study adds to the literature on corporate governance, revealing that compensation committees play an important role in mitigating an organization’s CEO horizon problem by adjusting CEO compensation.

Impact of corporate governance, financial and regulatory factors on firms’ acquisition ability

2020 ◽  
Vol 20 (3) ◽  
pp. 461-484
Author(s):  
Tahira Awan ◽  
Syed Zulfiqar Ali Shah ◽  
Muhammad Yar Khan ◽  
Anam Javeed
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Corporate Control ◽  
Chief Executive ◽  
Cross Sectional ◽  
Content Type ◽  
Factors Affecting ◽  
Regulatory Influence ◽  
Financial Strength

Purpose The capital markets witness phenomenal shifts of corporate control. With the shift of world economy into a global one, there has been a rapid increase in the volume of acquisitions. The previous studies shed light on the motives behind acquisition and impact of acquisition on both bidding and target firms. The purpose of this study is to bridge a gap in literature by exploring the factors affecting the acquisition ability (AA) of the firms. The study has analyzed the role of financial strength, corporate governance and regulatory influence on AA of acquiring firm. Design/methodology/approach Cross-sectional data has been analyzed with respect to Pakistan stock exchange for a period of 2004-2017 by using logit regression. Findings Analysis indicates that firm-specific variables are important determinants in firm’s decision to acquire. Chief Executive Officer duality and presence of institutional shareholders on the board contribute to this important phenomenon in the life of the acquiring firms. Bidding firm’s financial strength is also another important consideration while going for corporate control transfer transactions. The empirical results indicate the better AA for firms characterized by minimum capacity usage, lower level of intangible assets, lower debt levels and lower advertising expenses. However, the regulatory factor has no significant role in firms’ AA. The findings of the study are helpful for managers, regulators and policymakers. Originality/value Analyzing the role of financial strength, corporate governance and regulatory influence on AA of acquiring firm is a rare study, especially in an emerging country such as Pakistan.

scholarly journals Corporate governance, analyst following and firm value

2014 ◽  
Vol 14 (4) ◽  
pp. 453-466 ◽  
Author(s):  
Sulaiman Mouselli ◽  
Khaled Hussainey
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Ceo Compensation ◽  
Stock Exchange ◽  
Financial Analysts ◽  
Chief Executive ◽  
Analyst Following ◽  
Content Type ◽  
Large Sample ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of a firm’s corporate governance (CG) mechanisms on the number of financial analysts following UK firms. The potential effect of the number of analysts following firms in the UK on the association between CG mechanisms and firm value was also examined. Design/methodology/approach – Multiple regression models were used to examine the association between CG, analyst coverage and firm value for a large sample of UK firms listed in London Stock Exchange with financial year ends between January 2003 and December 2008. Findings – It was found that the aggregate level of CG quality is positively associated with the number of analysts following UK firms. In addition, the compensation score is the main component that affects the number of analysts following UK firms. The results suggest that financial analysts are particularly concerned with how much compensation executives and directors receive. This is consistent with Jensen and Meckling (1976) who argue that chief executive officer (CEO) compensation can be used as effective mechanisms for mitigating agency costs. Hence, higher levels of CEO compensation attract more financial analysts to follow the firm. Surprisingly, when the joint effect of both CG quality and the number of analysts following on firm value was examined, no significant effect was found for both variables on firm value. Originality/value – This paper contributes to prior research by providing the first empirical evidence on the impact of disaggregated levels of CG on analyst following and firm value for a large sample of UK firms.

Corporate governance and chief executive officer compensation

2008 ◽  
Vol 8 (2) ◽  
pp. 141-152 ◽  
Author(s):  
Steven T. Petra ◽  
Nina T. Dorata
Keyword(s):  
Corporate Governance ◽  
Boards Of Directors ◽  
Ceo Compensation ◽  
Chief Executive ◽  
Board Structure ◽  
Content Type ◽  
Compensation Committee ◽  
The Us ◽  
Low Performance ◽  
And Control

PurposeThis paper aims to examine whether there is an association between the level of performance‐based incentives offered to CEOs and the composition of firms' boards of directors and the compensation committee.Design/methodology/approachUnivariate tests are used to test the relation between the level of performance‐based incentives and corporate governance structures. A logistic regression analysis is used to predict the probability of CEOs receiving low performance‐based incentives when various characteristics of firms' boards of directors and compensation committees exist.FindingsThe authors find the presence of CEO duality reduces the likelihood of lower levels of performance‐based incentives offered to CEOs. Additionally, the authors find CEOs are more likely to receive lower levels of performance‐based incentives when the majority of the compensation committee members serve on less than three other boards, and when the size of the board is less than or equal to nine members.Research limitations/implicationsThis study is limited by the fact that the sample may not be representative of the general population of companies in the US.Practical implicationsShareholders who desire to keep CEO compensation levels low may consider supporting the separation of the positions of CEO and Chairperson of the Board, as well as supporting limiting the number of other boards directors may serve, and reducing or keeping the size of the board to a maximum of nine members.Originality/valueThe authors have documented an association between board structure and CEO compensation. It appears that company boards are able to monitor and control the compensation level offered to CEOs.

Chief executive officer compensation, corporate governance and performance: evidence from KSA firms

2019 ◽  
Vol 19 (6) ◽  
pp. 1216-1235 ◽  
Author(s):  
Gaafar Abdalkrim
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Organizational Performance ◽  
Ceo Compensation ◽  
Chief Executive ◽  
Listed Companies ◽  
Future Research ◽  
Content Type ◽  
Interesting Insight ◽  
And Performance

Purpose This paper aims to examine the relation between chief executive officers (CEOs) compensation and organizational performance in KSA listed companies. It also aims at investigating the effect of corporate governance mechanisms according to this relation. Design/methodology/approach The researcher uses unbalanced panel data regression analysis on a sample of 181 KSA listed companies from 2005 to 2014. Findings The estimation result suggests that CEO Compensation is positively associated with firm performance. The results also show that corporate governance positively and significantly affect the relation between CEO Compensation and performance. Research limitations/implications This research, like any other, has some limitations that can be addressed by future research. The important limitation of this research is that the generalizability of the results is limited by the fact that the majority of the firms in the sample are from material sector which is represented by 42 (32 per cent) firms versus pharmaceutical sector which is represented by only one (1 per cent) firm. Therefore, a future research can tackle the effect of CEO compensation, corporate governance on future firm performance independently. Practical implications The findings have some important implications for stakeholders such as policymakers, listed firms managers, business owners and academic researchers in the emerging KSA market. Besides, understanding the relation between CEO compensation, corporate governance and firm performance can aid the success of corporate modernization and economic reform in KSA. Originality/value The research attempts to fill a substantial gap in the literature by providing the first rigorous econometrics evidence on CEO compensation, corporate governance and firm performance. In addition, it provides interesting insight for researches, decision-makers and board members in KSA.

Corporate governance, CEO turnover and say on pay votes

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ayishat Omar ◽  
Alex P. Tang ◽  
Yu Cong
Keyword(s):  
Corporate Governance ◽  
Chief Executive ◽  
Ceo Turnover ◽  
Content Type ◽  
Compensation Committee ◽  
Say On Pay ◽  
The Usa ◽  
The Impact ◽  
Female Member

Purpose The purpose of this study is to investigate how compensation committee structure or characteristic impacts say on pay (SOP) voting dissent and the impact of SOP dissent on chief executive officer (CEO) turnover. Design/methodology/approach The authors use corporate governance and SOP data to test the relationships amongst variables. Additional analysis is performed using one-to-one propensity-score matched samples. Findings The authors find that firm-years with at least a female member present on the compensation committee are associated with lower SOP dissent. The authors find mixed results of the impact of SOP dissent on CEO turnover. Practical implications This paper suggests that diversity on the compensation committee, particularly the presence of at least a female member on the committee, serves as an important determinant of SOP voting outcome in the USA. The paper provides policymakers and practitioners with insights into factors influencing SOP voting outcomes and implications of SOP dissent for firms. Originality/value The findings of this paper contribute to the corporate governance literature by enhancing the understanding of the role of the compensation committee as it relates to SOP dissent and effect of SOP dissent on CEO turnover.

scholarly journals Corporate governance and performance of Italian gambling SMEs during recession

2018 ◽  
Vol 30 (3) ◽  
pp. 1939-1958 ◽  
Author(s):  
Fabio La Rosa ◽  
Francesca Bernini
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Boards Of Directors ◽  
Global Financial Crisis ◽  
Negative Relationship ◽  
Chief Executive ◽  
Positive Role ◽  
Firm Level ◽  
Content Type

Purpose This study aims to explore how the economic recession and some corporate governance (CG) provisions can affect the performance of Italian gambling small and medium-sized enterprises (SMEs) across different business segments. Design/methodology/approach This study uses a panel sample of 2,135 observations before and during the global financial crisis. Specifically, the roles of ownership, boards of directors, chief executive officer gender and gambling business segments are investigated in the Italian gambling market. Findings Ownership concentration has a negative relationship with the performance of foreigner- and financial-owned firms, while boards exert a positive role on performance. Interestingly, the financial crisis does not impact the performance of Italian gambling SMEs and some business segments, such as bingo, perform even better during the crisis. Research limitations/implications Further investigations should analyze the role of single games on firm performance. The consumer- and firm-level examinations offer very different perspectives and scholars should be aware of this when investigating the gambling industry. Practical implications This study might help both policymakers and other gambling firms, such as casinos, to better understand which appropriate CG model should be adopted and how it can positively influence performance, especially in recessionary times. Originality/value This study contributes to studies on hospitality and tourism by focusing on the complementary role of gambling SMEs with respect to casinos. It also increases knowledge on the role of CG in privately owned gambling firms, which thus far has been scantly investigated by scholars.

Exploring the influence of chief executive officer professional development and work context on organisation performance: A multi-theoretic perspective

2015 ◽  
Vol 21 (5) ◽  
pp. 675-694 ◽  
Author(s):  
Christian A Taniman ◽  
Timothy F O’Shannassy
Keyword(s):  
Professional Development ◽  
Corporate Governance ◽  
Chief Executive Officer ◽  
Chief Executive ◽  
Work Context ◽  
The Board Of Directors ◽  
Conceptual Paper ◽  
Research Propositions ◽  
The Right

AbstractUnderstanding the value the right chief executive officer selection and tenure choices can bring to an organisation is under researched in legal jurisdictions such as Australia where there is strong separation of the role of the chief executive officer and chairperson. The chief executive officer is the key organisation strategist and plays an important role in formulating and implementing strategy as well as keeping the board of directors informed of the work of the executive team. This paper reviews and synthesises the corporate governance literature to develop the argument that a chief executive officer’s professional development background and work context will impact his or her ability to favourably influence organisation performance. A series of research propositions of interest to a range of stakeholders inside and outside the organisation are developed drawing on a number of corporate governance theories (e.g., agency theory, stewardship theory). This conceptual paper develops a substantial future empirical research agenda.

Toward a theory on workplaces for smart workers

Facilities ◽  
2019 ◽  
Vol 38 (3/4) ◽  
pp. 298-315
Author(s):  
Luisa Errichiello ◽  
Tommasina Pianese
Keyword(s):  
Web Sites ◽  
Participant Observation ◽  
Secondary Data ◽  
Primary Data ◽  
Innovative Design ◽  
Content Type ◽  
New Type ◽  
Smart Working ◽  
Research Propositions

Purpose The purpose of this paper is to identify the main features of smart work centers (SWCs) and show how these innovative offices would support the implementation of smart working and related changes in workspaces (“bricks”), technologies (“bytes”) and organizational practices (“behaviors”). Design/methodology/approach In this study, scientific literature is combined with white papers and business reports and visits to 14 workplaces, including offices designed as SWCs, co-working spaces, one telecenter, one accelerator and one fab lab. Primary data were collected through interviews with managers and users and non-participant observation, whereas secondary data included web-sites, brochures, presentations, press releases and official documents. Findings The authors developed research propositions about how the design of spaces and the availability of technology within SWCs would support the “bricks” and “bytes” levers of smart working. More importantly, the authors assumed that this new type of workplace would sustain changes in employees’ behaviors and managers’ practices, thus helping to overcome several challenges traditionally associated with remote working. Research limitations/implications The exploratory nature of the research only provides preliminary information about the role of SWCs within smart working programs. Additional qualitative and quantitative empirical investigation is required. Practical implications This study provides valuable knowledge about how the design of corporate offices can be leveraged to sustain the implementation of smart working. Originality/value This study advances knowledge on workplaces by focusing on an innovative design of traditional offices (SWC). It also lays the foundations for future investigation aimed at testing the developed propositions.

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