Pengaruh Non-linear Kompensasi Manajemen dan Aspek Keahlian Dewan Komisaris Terhadap Penghindaran Pajak

This study focuses on the non-linear effect of management compensation and the expertise of the board of commissioners on corporate tax avoidance. This study utilizes secondary data obtained from the Indonesia Stock Exchange with a sample in a manufacturing industry that meets the criteria. Based on the results of sample selection, 345 observation samples were obtained from three years of observation (2017 to 2019). The analysis technique of this study uses regression, and uniquely in this study, the management compensation variable was specifically tested in the quadratic form to test the non-linear effect of management compensation on tax avoidance. The results of this study indicate that there is a non-linear effect between management compensation and tax avoidance. In addition, the aspect of expertise is very important for the board of commissioners to carry out its supervisory function. The expertise of the board of commissioners can encourage management decisions that tend to be more conservative. These findings can contribute to the development of taxation and corporate governance, which provides a new direction to complement previous research findings, especially regarding the non-linear relationship between management compensation and corporate tax avoidance.

Corporate Social Responsibility, Good Corporate Governance, and Management Compensation against Tax Avoidance

This study aims to obtain empirical evidence regarding the influence of Corporate Social Responsibility, Good Corporate Governance, and Management Compensation on Tax Avoidance. The population in this study are mining companies listed on the Indonesia Stock Exchange in 2016-2018. Determination of the sample using purposive sampling technique, obtained a sample of 8 companies with 40 observational data. The analysis technique and hypothesis testing are carried out by using panel data regression analysis through Eviews-9. The results show that Corporate Social Responsibility has a positive effect on Tax Avoidance, Good Corporate Governance has no effect on Tax Avoidance, and Management Compensation has a negative effect on Tax Avoidance.

Simple and Intuitive Business Practices in Financial Economics

In stark contrast to the sophisticated methods advocated by academics in business schools, actual business practices are typically simple and intuitive (e.g., valuation, debt management, compensation). Methods that have these characteristics are more likely to become widely used business practices for two reasons. First, they are less prone to overfitting to a particular setting and therefore are robust across economic environments and applicable in new settings. Second, they are easy to communicate and are verifiable. Therefore, they can spread easily across organizations and are hard to replace with new and improved methods. This explanation of business practices can help resolve puzzles in corporate finance, such as the variation in debt leverage across industries.

Antecedents of Equity Fund Performance: A Contingency Perspective

While the fund performance management literature has clearly documented that the fund size, fund family size, and net cash flow are important antecedents of equity fund performance, prior empirical studies have revealed mixed results that have not been adequately explained. Through the lens of the contingency perspective, we developed a conceptual model that examines how the expense ratio and management compensation as contextual factors interact with the fund size, fund family size, and net cash flow to affect equity fund performance. The empirical analyses were based on panel data including 690 equity funds in China over a 7-year period from 2009 to 2015. The results show that the expense ratio and management compensation moderate the effects of the fund family size and net cash flow on fund performance, and management compensation also moderates the relationship between the fund size and fund performance.

Effects of Key Management Compensation on Financial Performance of Listed Manufacturing Firms in Kenya

The aim of this study was to investigate the effects of management compensation on financial performance in Kenya using case of listed manufacturing firms. The study employed census method of data collection and secondary data sources over a period of 9 years, 2010-2018, for 15 listed manufacturing firms. The agency theory complemented by the contingency, self-determination, and expectancy theories was used in the study. The data was analyzed using ordinary least squares regression analysis model as well as the descriptive methods. Eviews software was employed in the data manipulation. The key finding of the study was that key management compensation was strongly positively associated (correlated) with the financial performance of listed manufacturing firms in Kenya while Director Emoluments affect financial performance of listed manufacturing firms negatively but not strongly. Another finding was that debt ratio highly negatively and statistically significantly influenced the relation between management compensation and financial performance of listed manufacturing firms in Kenya suggesting that debt is an important factor in determining the relation between management compensation and financial performance of listed manufacturing firms in Kenya. The findings of the study are important in that they can be employed in formulating policy initiatives and strategies for improving financial performance of firms in the country.

Determinants and consequences of clawback provisions in management compensation contracts: a structured literature review on empirical evidence

The goal of this systematic literature review is to provide a detailed understanding of the determinants and consequences of clawback provisions in management compensation contracts, motivated by the increasing global regulatory, practical, and academic importance of implementing this new corporate governance tool. We identify 44 empirical (archival and experimental) studies on this topic and review them based on an agency-theoretical framework. Our review of empirical clawback research offers insights into this growing field and supports future researchers in developing new research questions. Our main results are as follows. First, we still know very little about the drivers of clawback adoption, as prior research concentrated on the consequences of clawback provisions. Second, many studies indicate that clawbacks lead to better earnings quality (reduced re-/misstatements), better pay-for-performance sensitivity, increased firm performance, greater value relevance, and lower overinvestment. While there are indications that clawbacks may serve an incentive-alignment function for managers, their contribution may be dependent on other corporate governance mechanisms, e.g. board composition, as significant moderators. We develop a research agenda with detailed recommendations for future research from methodological and content perspectives. We expect that the research activity in this field regarding the European capital market will increase in light of the EU shareholder rights Directive of 2017.

Compensation-related institutional investor activism – a literature review and integrated analysis of sustainability aspects

Purpose This paper aims to analyse whether and how different types of institutional investors influence shareholder proposal initiations, say-on-pay (SOP) votes and management compensation from a sustainability perspective. Design/methodology/approach Based on the principal-agent theory, the authors conduct a structured literature review and evaluate 40 empirical-quantitative studies on that topic. Findings The traditional assumption of homogeneity within institutional investors, which is in line with the principal–agent theory, has to be questioned. Only special types of investors (e.g. with long-term and non-financial orientations and active institutions) run an intensive monitoring strategy, and thus initiate shareholder proposals, discipline managers by higher SOP dissents and prevent excessive management compensation. Research limitations/implications A detailed analysis of institutional investor types is needed in future empirical analyses. In view of the current debate on climate change policy, future research could analyse in more detail the impact of institutional investor types on proxy voting, SOP and (sustainable) management compensation. Practical implications With regard to the increased shareholder activism and regulations on SOP and management compensation since the 2007/2008 financial crisis, firms should be aware of the monitoring role of institutional investors and should analyse their specific ownership nature (time- and content-driven and as well as range of activity). Originality/value To the best of authors’ knowledge, this is the first literature review with a clear focus on institutional investor range and nature, shareholder proposal initiation, SOP and management compensation (reporting) from a sustainability viewpoint. The authors explain the main variables that have been included in research, stress the limitations of this work and offer useful recommendations for future research studies.