Corporate Personality: The Achilles' Heel of Executive Remuneration Policy

2012 ◽  
Author(s):  
Chrispas Nyombi
Keyword(s):  
Executive Remuneration ◽  
Remuneration Policy ◽  
Corporate Personality

scholarly journals Executive Remuneration Policy at Banks in Poland After the Financial Crisis - Evolution or Revolution?

2014 ◽  
Vol 17 (2) ◽  
pp. 25-44 ◽  
Author(s):  
Agnieszka Słomka-Gołębiowska ◽  
Piotr Urbanek
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Executive Pay ◽  
Legal Rules ◽  
Good Corporate Governance ◽  
Executive Remuneration ◽  
Remuneration Policy ◽  
Recent Financial Crisis ◽  
Public Banks ◽  
The Stability

The executive remuneration policy of financial institutions has been indicated as one of the key factors that led to the recent financial crisis. As a consequence a number of legislative initiatives and best practices have been imposed,aimed at strengthening existing and creating new standards of good corporate governance at banks. The purpose of this article is to assess the effectiveness of Poland’s new regulations concerning banks' executive pay, which were introduced in the aftermath of the recent financial crisis. The research results indicate that the new legal rules have not been fully enforced. Public banks in Poland are not fulfilling the reporting obligations imposed by law and international principles. Given the crucial importance of executive remuneration policy in the financial sector to the stability of the banking sector, the inability to evaluate the progress made in the adjustment of executive remuneration practices to the new regulations may be perceived as one of the important risk factors that has not been effectively eliminated or even reduced in Poland yet.

Remuneration consultants’ advice and its effect on pay

2015 ◽  
Vol 57 (4) ◽  
pp. 340-350 ◽  
Author(s):  
Ernestine Ndzi
Keyword(s):  
Best Practice ◽  
General Meeting ◽  
Annual General ◽  
Executive Pay ◽  
Annual General Meeting ◽  
Content Type ◽  
Executive Remuneration ◽  
Remuneration Policy ◽  
The Usa ◽  
The Uk

Purpose – The purpose of this paper is to investigate the nature of advice that the remuneration consultants offer to the companies on executive pay. It explores how the advice offered affects the level of executive remuneration. Furthermore, it investigates whether the nature of advice offered forms part of the reasons why remuneration consultants have been criticised to be correlated with high executive pay. Design/methodology/approach – This paper analysis the data obtained from interviewing remuneration consultants from prominent consultancy firms that operate in the UK and the USA. Findings – This paper demonstrates that remuneration consultants’ advice on executive remuneration is not always objective. The nature of advice depends on whether the consultants have a balance of portfolio of companies (self-interest) or whether they have the courage to stand up to confrontations from the executives (fear of executives). This study shows that the purpose of using remuneration consultants in advising on executive remuneration is defeated. Also, the practice pushes up pay levels. Research limitations/implications – The research focused on large consultancy firm operating in the UK and/or the USA. Access to the participants was very difficult due to their busy schedules. Practical implications – This paper demonstrates the effect that lack of best practice on benchmarking is partly responsible for the high executive pay levels. Social implications – This paper will inform companies on the nature of advice that remuneration consultant’s offer and its effect on pay levels. Secondly, it will provide the shareholders with vital information they require to vote on remuneration policy in the annual general meeting. Originality/value – This paper demonstrates the effect that lack of best practice on benchmarking is partly responsible for the high executive pay levels. This paper will inform companies on the nature of advice that remuneration consultant’s offer and its effect on pay levels. Secondly, it will provide the shareholders with vital information they require to vote on remuneration policy in the annual general meeting. Lastly, it informs policymakers on the grey areas of practice that requires best practice.

scholarly journals How to evaluate the quality of remuneration policy? Evidence from the Polish banking sector

2020 ◽  
Vol 70 (3) ◽  
pp. 423-447
Author(s):  
Agnieszka Słomka-Gołębiowska ◽  
Piotr Urbanek
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Institutional Perspective ◽  
Top Executives ◽  
Executive Remuneration ◽  
Remuneration Policy ◽  
Governance Practices ◽  
Foreign Corporations ◽  
Public Banks

AbstractIn our paper we use an institutional perspective to define the concept of the quality of remuneration policy. Traditional perspective focuses on pay-per-performance relationship between top executives' remuneration and companies' performance. This study is based on the assumption that the acquisition of normatively defined compensation practices and structures is more important for the successful organization than the practices which enhance efficiency defined on the basis of input (compensation) – output (company's performance) relationship. We examine the relationship between the quality of executive remuneration policy and corporate governance standards in banks with a controlling blockholder. Based on the sample of a hand-collected data on corporate governance characteristics, executive remuneration, and financial results of all public banks in Poland from 2005 to 2015, we find that the effective implementation of sound corporate governance practices should be rooted in the form of obligatory normative acts. Consistent with other studies we find a positive and statistically significant relationship between the corporate governance measures and the quality of remuneration policy. In particular, our study shows the significant role of two institutional factors positively determining the efficiency of incentive contracts: remuneration committees and institutional ownership. We also find that the banks controlled by foreign corporations, especially the US–UK–Ireland financial institutions, have a significantly more effective compensation policy than the banks controlled by domestic investors.

Corporate personality: the Achilles' heel of executive remuneration policy

2014 ◽  
Vol 56 (3) ◽  
pp. 184-196
Author(s):  
Chrispas Nyombi
Keyword(s):  
Analytical Approach ◽  
Banking Sector ◽  
Limited Liability ◽  
Executive Pay ◽  
Content Type ◽  
New Information ◽  
Executive Remuneration ◽  
The Media ◽  
The Uk ◽  
Corporate Personality

Purpose – This paper aims to explore the role corporate personality has played in the battle between executive remuneration and fairness, which is linked to rewarding performance. This paper also aims to explore some of the policy measures taken by the UK Government to curb excessive remuneration especially in the banking sector. Design/methodology/approach – This paper employs an analytical approach. An analytical approach relies on the collection of new information upon which to base any conclusions. The research supports the arguments being made in the paper. Findings – The paper shows how the ruling in Salomon, over a century ago, that cemented corporate personality and limited liability in the UK, is hampering many of the measures aimed at rewarding performance and promoting fairness in relation to executive remuneration. Originality/value – Limited research has been done on executive remuneration. Since executive pay has recently hit the media agenda, this paper purports to tackle a current and ongoing issue.

Factors driving changes to remuneration policies in South Africa

2019 ◽  
Vol 39 (2) ◽  
pp. 43-63 ◽  
Author(s):  
Mark Bussin
Keyword(s):  
South Africa ◽  
South African ◽  
Merit Pay ◽  
Drivers Of Change ◽  
Retention Strategies ◽  
Retention Strategy ◽  
Remuneration Policy ◽  
Chi Squared ◽  
Firm Data ◽  
E Mail

This study was conducted in 2012 and replicates Bussin and Huysamen’s (2004) work, conducted in 2003, on remuneration policies. It investigates the factors driving remuneration policy in South Africa and determines whether these factors have changed since 2003. Anonymous e-mail questionnaires were received from 131 senior company representatives. All participating companies were members of the South African Reward Association (SARA) or clients of a large remuneration consulting firm. Data were analysed using a chi-squared test and factor analysis. Results support Bussin and Huysamen’s study, which found that the two main drivers of change in policy were the retention of talented staff and the financial results of the organisation. However, three components of remuneration are receiving greater prominence than they did in 2003: governance in the organisation, merit pay and retention strategies. These findings suggest a greater shareholder expectation that pay should be linked to performance, and that pay acts as a retention strategy for critical staff.

Gestión de los intangibles del capital humano. Política de retribuciones y sus efectos. El caso de los grupos de empresa cotizados españoles

Oikos ◽  
2015 ◽  
Vol 14 (30) ◽  
pp. 49
Author(s):  
Esteban Pérez Calderón ◽  
Patricia Milanés Montero ◽  
Herenia Gutiérrez Ponce
Keyword(s):  
Human Capital ◽  
Stock Market ◽  
Capital Market ◽  
Return On Investment ◽  
Employee Productivity ◽  
Human Capital Management ◽  
Remuneration Policy ◽  
The One ◽  
Capital Humano ◽  
Los Grupos

RESUMENEn los últimos años, las empresas han venido realizando grandes inversiones en generosos mecanismos de retribución y compensación a sus empleados con la esperanza de alcanzar un doble objetivo. Por un lado, que estas actuaciones sean reconocidas por el mercado de valores y, por otro, esperando un mayor retorno de la inversión realizada en su personal. En el presente trabajo comprobamos cómo están repercutiendo estas inversiones sobre la productividad de los empleados (resultados económicos) y si son premiadas por el mercado de capitales (resultados financieros). Nuestro estudio se centra en los grupos de empresa cotizados españoles.Palabras clave: gestión, intangibles, capital humano, política retributiva. Intangibles of human capital management. Remuneration policy and its effects. The case of the spanish groups listed companies.ABSTRACTIn recent years, companies have been investing heavily in generous remuneration and compensation models for its employees hope to achieve two objectives. On the one hand, that these actions are recognized by the stock market and, second, expecting a greater return on investment in their human capital. In this paper we focus on to see how these investments are having an impact on employee productivity (economic results) and if they are rewarded by the capital market (financial results). Our study focuses on Spanish groups listed companies.Keywords: management, intangibles, human capital, remuneration policy.

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