Roles of CEO Pay Deviation and Firm Performance on the Expansion and Contraction of Firm Boundaries

2021 ◽  
Vol 2021 (1) ◽  
pp. 10051
Author(s):  
Elizabeth Lim
Keyword(s):  
Firm Performance ◽  
Firm Boundaries ◽  
Ceo Pay

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.

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.

Accounting and Stock Price Performance in Dynamic CEO Compensation Arrangements

2003 ◽  
Vol 78 (1) ◽  
pp. 143-168 ◽  
Author(s):  
John F. Boschen ◽  
Augustine Duru ◽  
Lawrence A. Gordon ◽  
Kimberly J. Smith
Keyword(s):  
Firm Performance ◽  
Stock Price ◽  
Ceo Compensation ◽  
Accounting Performance ◽  
Financial Gain ◽  
Price Performance ◽  
Long Run ◽  
Initial Effect ◽  
Ceo Pay

In this study we examine the long-run effects of unexpected firm performance on CEO compensation. We find that unexpectedly good accounting performance is initially associated with increases in CEO pay. However, this initial effect soon reverses, and is followed by lower CEO pay in later years. Overall, the CEO's long-run cumulative financial gain from unexpectedly good accounting performance is not significantly different from zero. In contrast, unexpectedly good stock price performance is associated with increases in CEO pay for several years. Thus, the CEO's long-run cumulative financial gain from unexpectedly good stock price performance is positive and significant.

Firm Performance and CEO Pay

2010 ◽  
Vol 19 (2) ◽  
pp. 137-147 ◽  
Author(s):  
Saibal Ghosh
Keyword(s):  
Firm Performance ◽  
Ceo Pay

scholarly journals The Overconfidence Of Boards And The Increase In CEO Pay Over Time

2014 ◽  
Vol 30 (6) ◽  
pp. 1901 ◽  
Author(s):  
Gregory L. Nagel
Keyword(s):  
Firm Performance ◽  
Institutional Investors ◽  
Bargaining Power ◽  
Alternative Explanation ◽  
Direct Evidence ◽  
Upward Trend ◽  
Ceo Pay ◽  
Survey Results ◽  
Over Time

This paper is based on Robert Shillers view that hiring of external CEOs is excessive due to boards overconfidence and causes reduced firm performance. External hire selections provide all CEOs with bargaining power. I show excessive external hiring provides an alternative explanation (excessive bargaining power) for the upward trend in CEO pay since 1945 that is largely consistent with the observed facts. A survey of the direct evidence on external hires performance provides uniform support for Shillers view after accounting for research supporting alternative views that only includes CEOs who survive. After adjusting for survival bias, the survey results consistently suggest that firms predominantly realize greater performance from internal promotion, all else equal. Overall, this papers findings increase support for succession through internal executive promotion, and suggest that institutional investors can expect greater bargaining power and wealth by advocating for internal hires more often.

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