scholarly journals The relationship between chief executive officer compensation and the size and industry of South African state-owned enterprises

2019 ◽  
Vol 17 ◽  
Author(s):  
Mariette Coetzee ◽  
Magda L. Bezuidenhout
Keyword(s):  
Chief Executive Officers ◽  
Ceo Compensation ◽  
African State ◽  
Chief Executive ◽  
Annual Reports ◽  
Performance Contracts ◽  
Ceo Pay ◽  
Managerial Implications ◽  
Executive Officers ◽  
The Relationship

Orientation: Concerns about exorbitant executive compensation are making headlines, because executives receive lucrative packages despite state-owned enterprises (SOEs) performing poorly. It appears as if chief executive officers (CEOs) are not being held accountable for the performance of the SOEs.Research purpose: The purpose of the study was to determine whether the size and the industry of an SOE had an impact on CEO compensation packages.Motivation for the study: A greater understanding of the relationship between CEO remuneration and the size and type of industry of SOEs would assist with the standardisation of CEO remuneration and linking CEO pay to SOE performance.Research approach/design and method: A multiple regression analysis on a pooled dataset of 162 panel observations was conducted over a 9-year period. Financial data of 18 SOEs were extracted from the McGregor BFA database and the annual reports of SOEs.Main findings: The findings show that the size of an SOE does not influence the total compensation of CEOs. However, larger SOEs pay larger bonuses due to these SOEs being in a stronger financial position to offer lucrative bonuses. CEO’s remuneration was aligned within certain industries.Practical/managerial implications: The findings emphasise the need to link CEO compensation with SOE performance. Standardisation in setting CEO compensation and implementing performance contracts should be considered.Contribution/value-add: The study confirms that CEO pay is not linked to performance and not justified when considering SOE size or industry.

scholarly journals CEO Monitoring and Board Effectiveness: Resolving the CEO Compensation Issue

2018 ◽  
Vol 21 (2) ◽  
pp. 123-134
Author(s):  
Chiraz Ben Ali ◽  
Frédéric Teulon
Keyword(s):  
Chief Executive Officers ◽  
Ceo Compensation ◽  
Chief Executive ◽  
Board Governance ◽  
Board Effectiveness ◽  
Past Performance ◽  
Compensation Committee ◽  
Ceo Pay ◽  
Executive Officers ◽  
The Impact

This study examines the impact of board governance mechanisms on the pay of Chief Executive Officers (CEOs) using a sample of major French listed companies for the 2009–2011 period. The results show that CEO pay is negatively associated with the presence of a family CEO and positively associated with board size, busy directors, board meetings, and compensation committee independence. We provide further evidence that CEO compensation increases with firm size, and both present and past performance. Our study casts doubt on the effectiveness of formal board attributes in constraining CEO compensation.

scholarly journals CEO Compensation and Firm Performance: The Role of ESG Transparency

2020 ◽  
Vol 4 (2) ◽  
pp. 278
Author(s):  
Chetna Rath ◽  
Florentina Kurniasari ◽  
Malabika Deo
Keyword(s):  
Firm Performance ◽  
Chief Executive Officers ◽  
Ceo Compensation ◽  
Negative Relationship ◽  
Chief Executive ◽  
Long Run ◽  
Ceo Pay ◽  
Executive Officers ◽  
The Impact

Chief executive officers (CEOs) of environmental, social, and governance (ESG) firms are known to take lesser pay and engage themselves in corporate social responsibility activities to achieve the dual objective of the enhancement of firm’s performance as well as benefit for stakeholders in the long run. This study examines the role of ESG transparency in strengthening the impact of firm performance on total CEO pay in ESG firms. A panel of 67 firms for the period of 2014–2019 has been analyzed using the two-step system GMM model, with NSE Nifty 100 ESG Index as the data sample and ESG scores from Bloomberg database as a proxy for transparency. Findings reveal that environmental and governance disclosure scores have the potential to intensify the negative relationship between firm performance and CEO compensation, while social disclosure scores do not. In addition, various firm-specific, board-specific, and CEO-specific attributes have also been considered controls affecting remuneration. This paper contributes to the literature by exploring the effect of exhibiting ESG transparency and its nexus with CEO pay as well as firm performance.

The effects of global financial crisis on the relationship between CEO compensation and earnings management

2020 ◽  
Vol 28 (2) ◽  
pp. 389-408 ◽  
Author(s):  
Oheneba Assenso-Okofo ◽  
Muhammad Jahangir Ali ◽  
Kamran Ahmed
Keyword(s):  
Financial Crisis ◽  
Earnings Management ◽  
Chief Executive Officers ◽  
Ceo Compensation ◽  
Global Financial Crisis ◽  
Chief Executive ◽  
Content Type ◽  
Multivariate Tests ◽  
Executive Officers ◽  
The Relationship

Purpose This paper aims to examine the effects of global financial crisis (GFC) on chief executive officers’ (CEO) compensation and earnings management relationship. Specifically, the authors examine whether the recent financial crisis had moderated the relationship between CEO bonus and discretionary accruals. Design/methodology/approach The authors use panel data for 1,800 firm-year observations (over a period of six years from 2005 to 2010) and use univariate and multivariate tests to test their hypothesis. The authors divide the period into pre-crisis, during-crisis and post-crisis periods to examine how the different financial crisis periods affect the relationship between CEO compensation and earnings management. Various alternative tests including endogeneity test suggest that the results are robust. Findings The authors’ multivariate results indicate that the relationship between CEO’ compensation and earnings management changes because of the GFC. Practical implications The findings, therefore, justify more monitoring and scrutiny to limit the existence of opportunistic managerial behaviour and for the appropriate designing of CEO compensation packages during abnormal economic circumstances. Originality/value So far as the authors’ knowledge goes, this is the first study which examines the relationship between CEO compensation and earnings management during GFC.

In retrospect: The influence of chief executive officers’ historical relative pay on overconfidence

2021 ◽  
pp. 147612702110048
Author(s):  
J Daniel Zyung ◽  
Wei Shi
Keyword(s):  
Chief Executive Officers ◽  
Empirical Support ◽  
Chief Executive ◽  
Firm Level ◽  
Self Confidence ◽  
Self Worth ◽  
Executive Officers ◽  
Leadership Research ◽  
The Relationship

This study proposes that chief executive officers who have received over their tenure a greater sum of total compensation relative to the market’s going rate become overconfident. We posit that this happens because historically overpaid chief executive officers perceive greater self-worth to the firm whereby such self-serving attribution inflates their level of self-confidence. We also identify chief executive officer- and firm-level cues that can influence the relationship between chief executive officers’ historical relative pay and their overconfidence, suggesting that chief executive officers’ perceived self-worth is more pronounced when chief executive officers possess less power and when their firm’s performance has improved upon their historical aspirations. Using a sample of 1185 firms and their chief executive officers during the years 2000–2016, we find empirical support for our predictions. Findings from this study contribute to strategic leadership research by highlighting the important role of executives’ compensation in creating overconfidence.

The two sides of CEO pay injustice

2018 ◽  
Vol 16 (1) ◽  
pp. 3-30 ◽  
Author(s):  
Herman Aguinis ◽  
Geoffrey P. Martin ◽  
Luis R. Gomez-Mejia ◽  
Ernest H. O’Boyle ◽  
Harry Joo
Keyword(s):  
Normal Distribution ◽  
Power Law ◽  
Chief Executive Officers ◽  
Risk Sharing ◽  
Chief Executive ◽  
Return On Assets ◽  
Content Type ◽  
Ceo Pay ◽  
Executive Officers ◽  
Two Sides

Purpose The purpose of this study was to examine the extent to which chief executive officers (CEOs) deserve the pay they receive both in terms of over and underpayment. Design/methodology/approach Rather than using the traditional normal distribution view in which CEO performance clusters around the mean with relatively little variance, the authors adopt a novel power law approach. They studied 22 industries and N = 4,158 CEO-firm combinations for analyses based on Tobin’s Q and N = 5,091 for analyses based on return on assets. Regarding compensation, they measured the CEO distribution based on total compensation and three components of CEO total pay: salary, bonus, and value of options exercised. Findings In total, 86 percent of CEO performance and 91 percent of CEO pay distributions fit a power law better than a normal distribution, indicating that a minority of CEOs are producing top value for their firms (i.e. CEO performance) and a minority of CEOs are appropriating top value for themselves (i.e. CEO pay). But, the authors also found little overlap between CEOs who are the top performers and CEOs who are the top earners. Implications The findings shed new light on CEO pay deservingness by using a novel conceptual and methodological lens that highlights systematic over and underpayment. Results suggest a violation of distributive justice and offer little support for agency theory’s efficient contracting hypothesis, which have important implications for agency theory, equity theory, justice theory, and agent risk sharing and agent risk bearing theories. Practical implications Results highlight erroneous practices when trying to benchmark CEO pay based on average levels of performance in an industry because the typical approach to CEO compensation based on averages significantly underpays stars and overpays average performers. Originality/value Results offer new insights on the extent of over and underpayment. The findings uncover an extremely large non-overlap between the top earning and top performing CEOs and to an extent far greater in magnitude than previously suggested.

Influence of chief executive officer servant leadership on middle managers' voice behavior

2021 ◽  
Vol 49 (5) ◽  
pp. 1-13
Author(s):  
Chun Yang ◽  
Wensong Zhang ◽  
Shaoxue Wu ◽  
Daisy Mui Hung Kee ◽  
Pan Liu ◽  
...  
Keyword(s):  
Servant Leadership ◽  
Leadership Style ◽  
Chief Executive Officers ◽  
Middle Managers ◽  
Chief Executive ◽  
Positive Influence ◽  
Voice Behavior ◽  
Promotion Focus ◽  
Managerial Implications ◽  
Executive Officers

On the basis of social learning theory, we explored the mechanism through which chief executive officers' use of the servant leadership style affects middle managers' voice behavior. We analyzed data obtained from a sample of managers of firms in the energy industry in China. We found that chief executive officers' servant leadership had a positive influence on organizational collective promotion focus through its effects on top management team servant leadership. Further, organizational collective promotion focus was positively correlated with middle managers' voice behavior through the mediator of middle managers' promotion focus. Finally, a promotion focus motivated middle managers to speak out more often in their organizations. Theoretical and managerial implications are discussed.

Passion in executive mentoring influences organizational innovativeness

2018 ◽  
Vol 46 (2) ◽  
pp. 219-231
Author(s):  
James Hatch Moore ◽  
Zhongming Wang
Keyword(s):  
Chief Executive Officers ◽  
Chief Executive ◽  
Organizational Improvement ◽  
Organizational Innovativeness ◽  
Confirmatory Factor ◽  
Managerial Implications ◽  
Opposite View ◽  
Executive Officers ◽  
First Time

Mentoring is a popular resource for individual and organizational improvement. In this study we examined for the first time passion in executive mentoring as a potential approach to developing organizational innovativeness. In most previous studies the executives, for example, chief executive officers, were the mentors, but we took the opposite view, namely, the executives were the mentees. Results confirmed the hypotheses that the executive's perception of the mentor's passion was positively related to the executive's perception of organizational innovativeness, through the quality of mentoring and cognitive adaptability. Confirmatory factor analysis and regression analysis confirmed the validity of the results. Results demonstrated the value of passion in executive mentoring and the subsequent link to organizational innovativeness via the quality of mentoring and cognitive adaptability. Theoretical and managerial implications and directions for further research are discussed.

Limiting Executive Compensation: The Case of CEOs Hired after the Imposition of 162(m)

2007 ◽  
Vol 22 (4) ◽  
pp. 599-621 ◽  
Author(s):  
Steven Balsam ◽  
David H. Ryan
Keyword(s):  
Firm Performance ◽  
Executive Compensation ◽  
Chief Executive Officers ◽  
Ceo Compensation ◽  
Chief Executive ◽  
Executive Pay ◽  
Internal Revenue ◽  
Compensation Package ◽  
Bonus Pay ◽  
Executive Officers

This study analyzes the effect of Internal Revenue Code section 162(m) on the compensation package of those chief executive officers (CEOs) hired after the imposition of this code section. Research documents that CEO compensation has increased dramatically since the imposition of section 162(m); yet, this research has not distinguished between the effects on the compensation of CEOs already in place when section 162(m) was imposed from those CEOs hired post-162(m) imposition. We focus our analysis on the compensation of CEOs hired after the imposition of section 162(m), because when firms hire a new CEO, they have a better opportunity to redesign the executive pay package. Consequently, we posit that section 162(m) will have its greatest effect when the affected companies change CEOs. Our analysis provides evidence that the increase in salary normally associated with the hiring of a new CEO has been mitigated and there has been an increase in the sensitivity of firm performance to bonus pay for CEOs appointed after 1994 in affected firms.

Perceived accountability for local government infrastructure assets: the influence of stakeholders

2017 ◽  
Vol 29 (4) ◽  
pp. 551-572 ◽  
Author(s):  
Pavithra Siriwardhane ◽  
Dennis Taylor
Keyword(s):  
Local Government ◽  
Chief Executive Officers ◽  
Chief Executive ◽  
Stakeholder Salience ◽  
Content Type ◽  
The Public ◽  
The Government ◽  
Executive Officers ◽  
Policy Incentives ◽  
The Relationship

Purpose The purpose of this study is to investigate the relationship between the degree of stakeholder salience and the degree of emphasis placed on accountability dimensions for infrastructure assets (IFAs) as perceived by mayors and chief executive officers (CEOs) of local government authorities (LGAs). Comparisons are drawn between the salience accorded to two broad stakeholder groups at the public level and at the government level. Design/methodology/approach Perceptions of mayors and CEOs are examined through a mail questionnaire survey administered among LGAs in Australia. Findings Overall accountability for IFAs by the LGAs is influenced by the salience accorded to the demands and needs of public stakeholders (PSs) but not the salience accorded to government stakeholders (GS). It is evident that public and managerial accountabilities are impacted by PS salience, whereas political accountability is impacted by the salience of GS. Thus, it emphasises that the establishment and implementation of policies, processes and systems that render transparency and responsiveness to the public, as well as service quality and the disclosure of performance measures, are positively affected by the salience accorded to PS groups. Research limitations/implications The results of the study may be affected by the inherent weaknesses associated with mail surveys. Practical implications Accountability of LGAs for IFAs to GS needs enhancement, specifically stronger policy incentives. Originality/value This paper contributes to the literature, providing evidence on how mayors and CEOs of LGAs perceive the salience of different stakeholders of IFAs and its impact on the perceived accountability.

Socializing accounting practices in governing boards: dairy co-operatives down-under

2016 ◽  
Vol 12 (1) ◽  
pp. 75-102 ◽  
Author(s):  
Karen VanPeursem ◽  
Kevin Old ◽  
Stuart Locke
Keyword(s):  
Chief Executive Officers ◽  
Design Methodology ◽  
Chief Executive ◽  
Document Analysis ◽  
Content Type ◽  
Challenges And Opportunities ◽  
Small Pool ◽  
Executive Officers ◽  
Accountability Practices ◽  
The Relationship

Purpose – The purpose of this paper is to evaluate the accountability practices of the directors in New Zealand and Australian dairy co-operatives. An interpretation of their practices, which focus on the relationship between directors and their farmer-shareholders, is informed by Roberts’ (2001a) understandings of a socializing accountability. Design/methodology/approach – The fieldwork consists of interviews with 23 directors, including all chief executive officers and chairmen, of six dairy co-operatives together with observations and document analysis. These co-operatives together comprise a significant portion of the regional dairy industry. The methodology draws from Eisenhardt’s (1989) qualitative approach to theory formation. Findings – The authors find that these directors engage in a discourse-based, community-grounded and egalitarian form of socializing accountability. As such, their practices adhere generally to Roberts (2001a) hopes for a more considerate and humble relationship between an accountor and an accountee. Social implications – Findings add to the small pool of research on the lived experiences of co-operative boards and to a parsimonious literature in socializing accountability practices. The contributions of the study are in advancing real understandings of alternative forms of accountability, in evaluating the conditions in which these alternatives may be likely to arise and in anticipating the challenges and opportunities that arise therefrom. Originality/value – The originality of the project arises from accessing the views of these industry leaders and, through their frank expressions, coming to understand how they achieve a form of a socializing accountability in their relationships with farmer-shareholders.

Sign in / Sign up

Export Citation Format

Share Document