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Firms must allocate resources effectively to cope with uncertainty, which can manifest as a disruption and an opportunity. Although information technology (IT) is a means to cope with uncertainty, chief executive officers (CEOs) may not always support IT investments due to the risky nature of IT, especially when facing uncertain conditions. While prior research suggests that CEO long-term compensation positively incentivizes IT investments, little is known about how different loci of uncertainty impact this relationship. To address this research gap, we study how firm-specific uncertainty and competitive uncertainty shape the influence of CEO long-term compensation on a firm's IT capital investment. Drawing on agency theory and prospect theory, we develop two hypotheses. First, we hypothesize that firm-specific uncertainty and competitive uncertainty positively moderate the influence of CEO long-term compensation on firm IT capital investment. Second, we hypothesize that competitive uncertainty has a stronger positive moderating effect than firm-specific uncertainty on the influence of CEO long-term compensation on firm IT capital investment. Our analysis of secondary longitudinal data from 2000 to 2007 of 357 public firms in the United States supports our hypotheses. In exploratory analyses, we found that CEO long-term compensation results in a higher riskoriented dominant logic in the firm, particularly in conditions of firm-specific uncertainty and competitive uncertainty, with competitive uncertainty having a stronger positive moderating effect. These findings uncover risk-oriented dominant logic as a theoretical mechanism that explains how CEO long-term compensation positively influences firm IT capital investment in uncertain conditions. We also conducted exploratory analyses using a different secondary dataset of 286 U.S. public firms from 2004 to 2019 to consider firm investments in transformative IT applications and found support for our theory. This finding triangulates our results across different time periods and different types of IT investments. This study contributes to theory and practice by providing a nuanced understanding of boundary conditions surrounding CEO long-term compensation, and decisions CEOs make vis-à-vis IT capital investments. [ABSTRACT FROM AUTHOR]

This paper aims to find an answer to the questions of "whether chief executive officers (CEOs) are compensated for market risk", and "how the combined interaction of board size and CEO duality moderates this relationship" from the tenets of agency theory and managerial power theory. Even though the contracting view of agency theory posits that agents are neither to be punished nor rewarded for events that go beyond their direct control (market risk), the research findings in the corporate governance domain are contradictory. It was found that Chinese and American executives were paid for market risk, including oil prices and exchange rates, which was explained by retention risk and weaker corporate governance systems. To shed light on previous inconclusive research, this paper investigates the topic further in a new country setting, that of Switzerland, because the previous results were mostly related to Anglo-Saxon countries. Switzerland is also one of the exemplary countries for executive compensation. Furthermore, it investigates the combined (cascaded) interaction effects of the board size and CEO duality on CEO compensation and market risk from the perspective of managerial power theory, which has not been previously analyzed in the literature to date. For the direct effect, in contrast to previous findings in Anglo-Saxon countries, it has been found that CEOs were not paid for market risk in Switzerland, which confirms agency theory's contracting prediction. This finding outlines the future comparative research area in this domain. For the combined interaction effect, it has been found that board size incorporated with CEO duality is the significant cascaded moderator, and large boards with CEO duality are significantly more effective in controlling asymmetric compensation, which confirms the efficacy of large boards with CEO duality in coping with asymmetric compensation and managerial entrenchment (managerial power theory). These results have both practical and academic implications for boards of directors, Human Resources and corporate governance literature, agency theory, and managerial power theory, by providing further evidence on previous inconclusive findings on board size, CEO duality, and the role of market risk in the CEO pay structure. [ABSTRACT FROM AUTHOR]

The article reports the findings of a pathbreaking national study that examines executive compensation in American environmental nonprofits. This article seeks to accomplish two goals: (1) examine the gender disparities in the pay of chief executive officers (CEOs), executive directors, and presidents in environmental organizations; and (2) analyze the ethnic/racial differences in the wages of the top executive in said nonprofits. The study uses financial information from Internal Revenue Service Form 990 to examine top executive salaries in 2,703 organizations. The author collected data from tax forms filed between 2018 and 2020. The article examines how gender and race/ethnicity are associated with compensation. It also analyzes how region, organizational type, urbanization, organizational revenue, staff size, the board size, the receipt of bonuses and incentives, the size of the bonuses/incentives, and the size of the base wages are related to overall compensation. Men occupied 51.2% (1,383) and women 48.8% (1,320) of the top executive positions in the organizations studied. Whites dominate the CEO position, that is, 92% or 2,488 of the CEOs were White, and 8% (215) were people of color. The study found significant gender pay gaps. While the median compensation for men was $117,468, it was $88,568.50 for women. Hence, women CEOs earned 75.4% of what men were paid. There was also an ethnic/racial pay gap. The study found that White CEOs earned a median income of $102,801. The median wage for Asian CEOs was 97.6%, Black CEOs was 96%, Latinx CEOs was 80.8%, and Native American CEOs was 73.4% of what White CEOs earned. White men obtained the highest median compensation of all gender, and racial/ethnic groups studied. The total compensation also varied by region, organizational revenues, organizational type, level of urbanization, staff size, board size, receipt of bonuses and incentives, the size of bonuses/incentives, and size of base wages. The size of the organization's revenue, whether a CEO received bonuses/incentives, region, the CEO's race/ethnicity, the CEO's gender, and size of the staff were significant factors in the multivariate regression model. [ABSTRACT FROM AUTHOR]

This study examines how gender diversity on nonprofit boards relates to chief executive officer (CEO) compensation using data of 1,835 501(c)(3) organizations with the GuideStar Platinum Seal of Transparency. The analysis reveals a positive association between women's representation on a governing board and female CEO compensation until women's proportion reaches 82%. By contrast, there is a negative relationship between women's representation on boards and male CEO compensation. Overall, the findings suggest that board gender diversity has distinctive implications for CEO compensation depending on CEO gender and that having more women on governing boards contributes to closing the gender pay gap for nonprofit executives. These findings can be applied to other dimensions of diversity, including racial and ethnic diversity. [ABSTRACT FROM AUTHOR]

The current economic realities of the business world require firms to focus on all areas of organizational activities necessary to implementing a chosen course of action. It has been asserted that deploying information technology strategy can be quite helpful in engendering sustainable growth, greener corporate environment, and promoting environmental consciousness. In corporate governance, Chief Executive Officers (CEOs) are saddled with the responsibility of designing firm's strategies for competitiveness and they do this based on their assessment of risk involved, the long term nature, and uncertainty connected with IT strategies. This study therefore examined whether IT strategy moderates the nexus between CEO equity based compensation and firm's competitiveness. To investigate this, the study used firm-level secondary data of 106 quoted firms on the Nigerian Exchange Group for the period 2011 - 2020. Ordinary least square and panel data estimation techniques were used. The Hausman test conducted to choose between fixed effect and random effect models revealed the appropriateness of the random effect model. In the OLS and random effect models, the coefficient of CEO equity compensation was negative, implying that higher CEO compensation is not contemporaneous with higher firm's competitiveness. However, this estimate is not statistically significant and so the weight of this negative relationship is rather insignif icant. The introduction of IT strategy as a moderator into the model produced positive interaction effect on firm's competitiveness. Overall, there is the tendency for CEO compensation to enhance firm's competitiveness in the presence of IT strategy. Accordingly, IT enabled greener corporate environment encourages competitiveness and firm's sustainable growth. [ABSTRACT FROM AUTHOR]

Nonprofit hospital chief executive officer (CEO) compensation has received considerable attention in light of nonprofits' tax-favored status as well as the high costs of hospital care. Past studies have found that hospital financial performance is a significant determinant of CEO pay but nonprofit performance, including quality and charity care, are not. Using post-ACA data, we re-examine whether a variety of hospital performance measures are important determinants of nonprofit hospital CEO compensation. We found mixed evidence with respect to the significance of the association between financial performance and uncompensated care and CEO compensation. Among the other nonprofit performance measures, patient satisfaction was significantly associated with CEO compensation, but other measures were not significant determinants of CEO compensation. Our results suggest nonprofit hospitals balance their financial health against their mission when setting CEO incentives. Additional policy targeting transparency in hospital CEO compensation may be warranted to help policymakers understand the specific factors used by hospital boards to incentivize CEOs. [ABSTRACT FROM AUTHOR]

The CEO pay ratio, measured as the ratio of CEO pay over the median salary of a firm's employees, is the most often quoted number in the popular press. This ratio has reached 281 this last year for S&P500 firms, the largest US firms by capitalization (as of November 21 2019). But the B-ratio I proposed here, measured as the CEO pay over the total payroll of the firm, relates CEO pay to the salary of each employee and may be the most relevant and informative figure on CEO pay as perceived by the firm's employees themselves. How much a typical employee of the S&P500 firms implicitly "contributes" to the salary of his/her CEO? An amount of $273 on average or 0.5% of one's salary, that is, one half of one percent on an individual salary basis. To assess whether such a contribution is worthwhile, one must determine the value of the CEO for the organization and its workers and stakeholders. The Appendix provides the data for all 500 firms regrouped in 10 industries (Bloomberg classification). [ABSTRACT FROM AUTHOR]

India's corporate legislative environment has witnessed defining moment with the advent of Companies Act, 2013, which has introduced many seminal features relating to good corporate governance practices of which one of them is the provisions relating to executive compensation. Studies on executive compensation have observed that there is a clear disconnect between executive compensation and financial performance of the company hampering long term value creation for both company as well as for investor community. The purpose of this paper is to critically evaluate the impact of the provisions relating to executive compensation (CEO compensation) as given under Companies Act, 2013 with the financial performance of NIFTY 50 companies during the last decade. Our study comprises of data collected from NIFTY 50 Index companies for the financial year 2007-08 to 2016-17 using CMIE prowess database and from Annual reports. The paper is quantitative in nature, where we have used multiple regression for the analysis using SPSS 23.Our analysis on CEO compensation in the Indian context observes that the traditional argument of agency theorists towards controlling agency costs is by linking CEO pay with the organizational performance viz., sales, EBIT, and ROI do not hold good. We found out that CEO pay has no significant relationship with the Sales, EBIT, and ROI except ROA. The Study highlights that pay for performance or linking CEO pay with performance indicators cannot be established and does not hold any ground in the Indian context. Our study is a clear demarcation from the traditional knowledge generated from the literature concerning pay-performance metrics and suggests for a change in the disclosure practice by companies relating to CEO pay, which is for the inclusion of CEO compensation during the previous year as well while they are disclosing the current year CEO compensation at the same instance. It will be a case for best practice in executive compensation. The study established that the Companies Act, 2013 is an effective legislative check mechanism relating to CEO compensation in ensuring good corporate governance environment. An implication of this paper is that it addresses the issue of legislative mechanism and response in the overall corporate governance climate in dealing with executive compensation. [ABSTRACT FROM AUTHOR]

Introduction: Senior executive positions in hospitals have traditionally been held by men, and do not reflect the gender, racial, ethnic, and cultural diversities of the communities they serve. Despite sex parity in medical school graduates, women remain underrepresented in hospital executive leadership positions. In this study, the authors examined differences in gender composition and compensation of Maryland hospital executives. Methods: The authors examined 47 Maryland hospitals' publicly available tax forms from 2013- 2018. Data collected included hospital revenue and executive positions' count, salary, and gender. Executive positions included President and/or Chief Executive Officer (P/CEO), Chief Financial Officer (CFO), Chief Medical Officer (CMO), Chief Nursing Officer (CNO), and Chief Operating Officer (COO). All monetary values were inflation-adjusted to the 2017 dollar. Results: Women executives were underrepresented across most roles: P/CEO (41/272, 15%), CFO (72/260, 28%), CMO (28/182, 15%), and COO (44/147, 30%). CNO showed a higher proportion of women executives (129/140, 92%). There were no significant changes in the proportion of women executives over the study period (p=0.19). Men CNO's had significantly higher salaries as a percentage of hospital revenue (0.16% vs 0.12%, p=0.04) and men COOs had significantly higher salaries as a percentage of hospital positive profit (3.65% vs 2.24%, p<0.01). Conclusion: Data from Maryland hospitals suggest that women remain underrepresented in healthcare executive roles. Further, women executives are generally undercompensated compared to men in similar roles. This study further highlights the need for mentorship and dedicated career pathways to improve women representation in leadership roles in healthcare. [ABSTRACT FROM AUTHOR]

In this paper, we examine executive compensation data from 78 major U.S. oil and gas companies over a 24-year period. Perhaps in no other industry are the fortunes of so many executives so dependent on a single global commodity price. We find that a 10% increase in oil prices is associated with a 2% increase in executive compensation. This oil price effect holds for both CEOs and non-CEOs and separately for several different individual components of compensation, including bonuses. We find that the oil price effect is larger in companies with more insiders on the board, and asymmetric, with executive compensation rising with increasing oil prices more than it falls with decreasing oil prices. We then discuss potential mechanisms drawn from the broader existing literature on executive compensation. [ABSTRACT FROM AUTHOR]

Chief executive officer (CEO) compensation is highly scrutinized, with nonprofit organizations often receiving additional attention due to their tax-exempt status. Understanding hospital CEO compensation is of increasing importance as health care costs remain high and strong leadership is required to implement new health policies. This study documents CEO compensation at nonprofit hospitals in the United States for 2010 and 2015. We compare hospital CEO compensation with CEO compensation in other institution types, including nonhospital health care. We also explore changes in hospital CEO compensation over time and differences across states. We find CEOs at hospitals earn substantially less than CEOs of publicly traded companies though more than presidents of nonprofit institutions of higher education. Additionally, we find that the relationship between CEO compensation and hospital size was weaker in 2015 than in 2010, and substantial variation in CEO compensation exists across states. [ABSTRACT FROM AUTHOR]

This paper examines the effects of several factors, including performance, on attitudes toward high executive pay. We ask: would people agree on whether a CEO's pay is too high or too low, fair or unfair, and right or wrong, if they could be more certain than typically possible regarding a CEO's relevant contributions? Using data from a population-based survey experiment (N = 1,170), we find that the effects of a CEO's inputs are small next to the effects of predispositions (e.g. core values people bring to the issue), with implications for how pay at the top is justified. [ABSTRACT FROM AUTHOR]

We explore the effect of institutional directors on Chief Executive Officer (CEO) pay (total, fixed, and variable compensation). We delve particularly into the impact of pressure-sensitive and pressure-resistant institutional directors, who, respectively, represent institutional investors who maintain and investors who do not maintain a business relationship with the firm whose board they serve on. Focusing on CEO total pay, the findings show that institutional and pressure-resistant directors on boards behave similarly, affecting CEO total pay in a nonlinear way: as the presence of institutional and pressure-resistant directors on boards increases, the monitoring hypothesis prevails, and subsequently, better corporate governance decreases CEO total pay. However, when their presence on boards exceeds a critical point, the entrenchment hypothesis holds, thereby leading to an increase in CEO total pay. Contrary to our predictions, pressure-sensitive directors do not affect CEO total pay. Regarding the CEO's compensation structure (fixed and variable), the results suggest that institutional and pressure-resistant directors increase fixed compensation and reduce variable pay, while pressure-sensitive directors affect neither fixed nor variable compensation. This evidence supports the view that institutional directors should be considered as a heterogeneous collective. [ABSTRACT FROM AUTHOR]

Complementing the existing partisanship and income distribution literature that focuses on the earnings of all employees, this paper examines the effect of left government partisanship on top managers. Drawing on firm-level top executive compensation data across thirteen advanced industrialized countries, the paper shows that left government partisanship principally leads to lower CEO compensation, either through laws that enhance workers' collective bargaining power vis-à-vis management or laws that allow shareholders to cast proxy votes on executive compensation (i.e. say-on-pay laws). Furthermore, I show that left government partisanship reduces CEO pay more heavily in those firms that more strongly favor labor's competing stakeholders. In particular, left partisanship reduces executive compensation more heavily in firms that set aside more revenue for shareholders, managers, or creditors, that is, firms with higher asset return, stock return, or debt. These findings highlight how the macro-politics of rising top income inequality at the national level interacts with the micro-distributive conflicts at the firm level. In particular, financialization, such as the rise of the shareholder value revolution, may accentuate the impact of partisan politics against top income inequality. [ABSTRACT FROM AUTHOR]

This study examines the compensation of newspaper company chief executive officers (CEOs) and other top executives, comparing compensation with key measures of the companies' financial performance and employment levels. Fixed-effect regressions found only a small relationship between CEO pay and companies' market value for 2000 to 2013. There was no relationship between pay and return-on-assets or return-on-equity. Unobserved characteristics of individual companies are associated with CEO pay. The implications for the financial health of newspaper companies are discussed. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to examine the asymmetric behavior between CEO pay and firm performance in Nigeria.Design/methodology/approach The study adopts a two-step dynamic panel generalized method of moments (GMM) to reveal asymmetric responses of CEO pay to positive and negative shocks in firm performance.Findings The research outcomes of a two-step dynamic panel GMM) adopted reveal asymmetric responses of CEO pay to positive and negative shocks in firm performance. This implies that CEOs are handsomely compensated for good performance, but not punished for poor performance.Originality/value The study, therefore, suggests that CEO pay fails to serve as an internal corporate governance mechanism to alleviate agency problem in Nigeria's listed firms. [ABSTRACT FROM AUTHOR]

Abstract CEO pay is at record levels and may affect more than just company bankrolls. Across five studies, we measured consumer (Studies 1 & 2) and employee (Studies 3a & 4) perceptions about a hypothetical company described as having a high (350:1) or low (25:1) CEO-to-worker pay ratio. People indicated being less likely to purchase products and want a job from high-ratio (vs. low-ratio) companies (Studies 1 & 2). Further, global impressions of high-ratio companies were more negative, and these companies were seen as less employee oriented, though not less innovative by both consumers (Studies 1 & 2) and employees (Study 3a), even when controlling for individual compensation levels (Study 3a). Additional results support the possibility that perceived ratio fairness mediated the link between ratio and these judgments (Studies 2 & 3a). Further, using real-world employee ratings, Study 3b found that CEO-to-worker pay ratios are negatively correlated with employee ratings of work-life balance and compensation—findings that held controlling for company size and profits. Finally, we found that the salience of CEO responsibilities moderated the link between CEO ratio and employee perceptions by improving negative perceptions of high-ratio companies (Study 4). Implications and important future directions are discussed. (197 words). Highlights • High pay ratios negatively affect company impressions and perceptions of employee welfare. • High pay ratios additionally negatively affect buying behavior and job interest. • Perceptions of pay ratio fairness may explain how pay ratios affect views of companies. • Negative perceptions of high pay ratios are mitigated by salience of CEO responsibilities. [ABSTRACT FROM AUTHOR]

In a controversial judgement of 26 February 2018, the Supreme Court has altered in a significant manner the Spanish corporate universe by suddenly invalidating the interpretation which was considered pacific and which the General Directorate of Registries and Notaries and the majority of the scholars have been defending of the remuneration regime of the members of the board of directors in the capital companies. Against the almost unanimous understanding that the provisions of article 217 of the Spanish Companies Law (statutory reserve and approval by the general shareholders' meeting of the maximum remuneration amount) do not apply to those directors which have been vested with executive faculties, who are only subject to the rules of article 249 of the Spanish Companies Law, the Supreme Court affirms that both regimes are not alternative but rather that they should be applied in a cumulative way. Thus, in the opinion of the Court, the remuneration of the executive directors must be contemplated in the bylaws, adjusted to the maximum limitations imposed by the shareholders, abide by the rules set forth in article 217 of the Spanish Companies Act and, in addition, be captured in an agreement which complies with the requirements of sections 3 and 4 of article 249 of the Spanish Companies Act. [ABSTRACT FROM AUTHOR]

Share-based incentives, which theoretically align executive and shareholders' interests (agency theory), comprise a significant portion of executive remuneration. Detractors propose that such incentives could allow rent extraction (managerial power theory). To enable proper governance, stakeholders (both shareholders and regulators) need to be aware of the characteristics of share-based incentives. The aim of this study was to evaluate the trends relating to executive share-based incentives, as well as the reliability of available data sources thereof, in South Africa. Firstly, a trend analysis (2002-2015) was done for companies listed on the Johannesburg Stock Exchange. Share options were the most popular share-based incentive until 2008, but were then replaced by share appreciation rights (SARs) and later by full quantum schemes (performance and restricted shares). Compared to global evidence, SARs were popular for longer and full quantum schemes became prevalent later in South Africa. Increased use of full quantum schemes in later years signal improved alignment of executive/shareholder interest (in line with the agency theory). This study, secondly, commented on the reliability of the IRESS financial database in recording sharebased incentives, when compared to the annual financial statements (AFS). Numerous discrepancies in IRESS significantly detracted from its usefulness as a sole data source when evaluating executive share-based incentives. Divergent disclosure practices in the AFS increased the risk that executives in South Africa could be utilising share-based incentives to extract rents from companies. It is recommended that regulators should prescribe comprehensive standardised disclosure for sharebased incentives. [ABSTRACT FROM AUTHOR]

The article focuses on adopting defensive measures is not associated with significant changes in chief executive officer (CEO) pay. It mentions competition for managerial talent is positively associated with CEO pay such as higher firm value, especially in firms with a staggered board. It also mentions protection might be beneficial to prevent market pressure from introducing value-reducing distortions in executive pay.

This article analyses recent trends and determinants of chief executive (CEO) pay in the New Zealand public sector, and of numbers and pay of senior managers in the sector. Comparisons are made with the listed company private sector. It turns out that both CEO pay growth and numbers of senior managers in the public sector have lagged behind those in the private sector, while senior manager pay has moved ahead. [ABSTRACT FROM AUTHOR]

This study aims to assess the impact of APS 510 standard on CEO remuneration-performance association in Australian Authorized deposits taking institutions (ADIs). Using panel data GLS and dynamic GMM estimation models, a key objective of this research is to investigate the role of regulatory standards on the empirical association between executive compensation and firm performance. The research uses data from 45 listed Australian financial institutions for the period 2004-2015. We observe no statistically significant evidence to show that CEO cash bonus is excessive in banking sector as claimed by various financial press and business media. Further analyses reveal the differing but substantial functions of APS 510 in shaping the association between a firm's CEO short-term incentives and corporate performance depending on the nature and characteristics of the firm (ADIs vs non-ADIs). As the regulatory standard is legally binding for all ADIs and not necessarily for non-ADI companies, CEO's annual variable remuneration for the ADI category is somehow lower. This implies that the standard plays a critical role in reducing the level of CEO short-term incentives in the ADI group of firms. Empirical results show no significant statistical influence of the standard in shaping the relationship between CEO long-term incentive and market based performance of the Australian banking system. Our findings here are consistent with prior studies in developed countries such as the US. Policy-wise, we conclude that regulators should encourage corporate board of firms to increase long-term incentives in CEO remuneration in order to align managements' actions and shareholders interest of enhancing firm value. [ABSTRACT FROM AUTHOR]

Say on pay (SOP) is a relatively new governance mechanism that allows shareholders to pronounce on the suitability on executives' compensation. The literature has mainly examined SOP effects on Anglo Saxon contexts of corporate governance, reporting mixed results and highlighting the need to deepen our understanding of its real impact, as well as its interactions with other mechanisms of governance. Concerning these gaps, the present research analyzes the effectiveness of SOP as a mechanism for aligning CEO compensation in the context of Spanish listed companies --- a good representative model of continental European systems of corporate governance---. It also examines the moderating effect of board monitoring and ownership structure. Using panel data and linear regression methodologies on a set of companies from 2013 to 2016, the results show that SOP generally increases the alignment of CEO compensation, although its effectiveness is reduced in companies with overcompensated CEOs and in owner-managed companies. [ABSTRACT FROM AUTHOR]

This study examines the causal relationship between CEO pay and firm performance in Nigeria for the period 1998-2010, using annual data of 63 non-financial listed firms. We adopt a two-step dynamic generalized method of moments to explore the causal relationship. The study establishes a bi-directional relationship between CEO pay and firm performance. While CEO pay Granger-causes firm performance, firm performance also Granger-causes CEO pay. It implies that CEO pay acts both as a reward and a performance motivator. This study therefore suggests that CEO pay effectively aligns shareholders' interests with those of CEOs; hence stakeholders should focus more on CEO pay as a corporate governance mechanism to reduce agency problem in non-financial listed firms in Nigeria. [ABSTRACT FROM AUTHOR]

Following the latest research trend which argues that the effects of CEO discretion on executive pay-performance sensitivity (EPPS) are some "contingent effects" instead of the "fixed effects", the paper innovatively addresses the moderating role of CEO tenure in the relationship between CEO discretion and EPPS. For this purpose, based on the insights of game theory, the study creates a comprehensive theoretical algorithm model of EPPS with the introduction of two new critical variables, namely CEO discretion and CEO tenure into the classical principal-agent models of EPPS. By adopting the method of differential calculus, the model solution is calculated and further discussed. According to the model results, CEO tenure can moderate the relationship between CEO discretion and EPPS. To be specific, CEO discretion of fresh CEOs is positively related to EPPS; while for senior CEOs, CEO discretion is negatively related to EPPS. This finding is of great significance to reconcile the conflicting views on the relationship between CEO discretion and EPPS by proving fresh CEOs' firmserving motivations and senior CEOs' self-serving motivations. [ABSTRACT FROM AUTHOR]

Our study reveals how two separate dimensions of board composition--the proportion of independent directors and of non-independent directors--influence CEO compensation in Western European firms. Controlling for the simultaneous determination of CEO pay structure and board design, we find that firms with a higher proportion of non-independent outsiders on their boards pay less direct compensation (salary + bonus) and less equity-linked compensation to their CEOs. By contrast, CEOs working for firms with more independent boards receive more equity based-pay. When we control for the fact that equity linked is not granted systematically in Europe we find that firms with more independent directors on the board tend to grant equitylinked compensation more often than firms with more non independent outside directors. Our results challenge the commonly accepted view of independent directors as safeguards of shareholder value, uncovering the relevance of non-independent outsiders for pay moderation and incentives. [ABSTRACT FROM AUTHOR]

The Netherlands adopted shareholders' say on pay over a decade ago. The general meeting of shareholders must approve the remuneration policy and any amendments to it. This Dutch approach offers fruitful insights into how say on pay works in practice. In the light of the recent European proposal to introduce a uniform say on pay, we examine the merits of the Dutch system. First, we describe the legal framework of the Dutch say on pay and its background. Then, using hand-collected voting data, information from the minutes of general meetings and ownership data for the entire Dutch say on pay period (2004-2014), we address and discuss both its direct and its indirect effects. Our study shows that, although remuneration proposals are seldom rejected, the influence of shareholders on the remuneration policy of the company is considerable. Furthermore, the Dutch approach to say on pay stimulates shareholders' dialogue and increases pressure on boards regarding remuneration matters, even in the presence of large insider shareholders. [ABSTRACT FROM AUTHOR]

This paper examines the extent to which the growth in rents can explain the upward redistribution in income since 1980. It examines and provides preliminary estimates for the growth of rents in four main areas: increased patent and copyright rents, the growth of the financial sector, the increase in CEO pay due to the failure of the corporate governance, and the increase in pay for the most highly paid professionals due to protectionist barriers. [ABSTRACT FROM AUTHOR]

This study explores the impact of board structures on risk taking-CEO pay association in Australian financial institutions. Using a panel data of 45 listed Australian financial institutions for the period 2004-2015, we examine the empirical relationship between firms expected default probability and CEO pay. Our results show that deposit taking institutions with a greater number of nonexecutive directors on the board generally have an expected default probability (EDP) that is more sensitive to CEO short-term employee benefits. However, a lower response of EDP to changes in CEO short-term employee benefits in non-deposit taking institutions is observed. To a large extent, this phenomenon is explained by the existence of moral hazard problem in banking industry. As depositors are insured against losses, nonexecutive directors may fail to monitor executives taking on risky investments that generate short-term gains in order to boost their cash bonus and other short-term risk remuneration. Our results suggest that boards associated with more nonexecutive directors' increase (reduce) the responsiveness of expected default probability to changes in CEO short-term employee benefits (long-term variable remuneration pay). We observe that Australian financial institutions with large boards are linked to EDP which is sensitive to both CEO short-term and long-term remuneration incentives. Institutions with larger boards motivate their CEOs to invest in high risk financial assets, consequently escalating the level of CEO risk-taking. Finally, independence of the board members plays a critical role in reducing the level of CEO risk-taking only if CEO remuneration is largely made of long-term incentives remuneration such as options and share restricted payments. In line with other studies from US, boards should use long-term incentives in CEO remuneration to reduce agency costs and increase firm value. [ABSTRACT FROM AUTHOR]

This study investigates the role of external monitors, in the form of analyst recommendations, on CEO pay cuts. We use the theories of signaling and optimism to arrive at propositions that predict the relationship between analyst recommendations as external monitors, and CEO pay cuts. CEO pay cuts - which constitute a strong incentive for CEO behavior - have received only limited attention in extant research. Analysis of data for US public firms from 1998 to 2013 suggest that firms with strong external monitoring mechanisms, such as public analyst recommendations, are more likely to implement pay cuts. Our findings reveal that analyst recommendations serve as important and objective external signals and a monitoring mechanism for determining CEO pay cuts. Specifically, low-performing firms and firms with high CEO pay before analyst recommendations are more likely to integrate the analyst downgrades in their decision process regarding CEO compensation. From our analysis, practitioners could learn that - even though they might find it difficult to implement CEO pay cuts - such pay cuts are not only effective but also could be implemented based on external signals from analysts. A takeaway for external analysts is the powerful effect that their negative signals have on CEO pay cuts, thus questioning the optimism bias that is so prevalent in the industry. In order to serve as truly 'objective' external monitors, analysts should use ratings judiciously as signaling mechanisms. [ABSTRACT FROM AUTHOR]

College football coaches' employment contracts and compensation garner public attention and scrutiny in much the same way as those of corporate CEOs. In both cases, the public perception is that they must be overpaid and pampered. Economic theory claims that for coaches and CEOs to be overpaid, they must be receiving compensation in excess of the value they create for their organizations. However, both receive pay-for-performance compensation, which structurally aligns their compensation with value creation. This means we need to examine the underlying structure of the contract that gives rise to the observed compensation to determine whether they are appropriately compensated. We compare the employment contracts of Division I Football Bowl Subdivision (FBS) college football coaches with those of corporate CEOs during the period 2005 to 2013. We find that coaches are not overpaid, and their contracts are fairly drawn. We also show that CEO and coach contracts exhibit many common features. These contract features are consistent with what economic theory would predict. [ABSTRACT FROM AUTHOR]

Introduction: The World Health Organization (WHO) estimates that together tobacco and alcohol kill about 9 million people annually despite aggressive and widespread public health controls. These legal industries persist because of the demand for their products and their substantial economic influence, which is magnified by the concentration of wealth in the executives of leading corporations that profit from increased legal drug sales. Materials and methods: This preliminary study quantifies the link between global premature deaths from these legal addictive drugs as a function of executive compensation in order to provide the necessary data to make more effective policy recommendations for preventing legal drug-related deaths. Results: The results indicate a need to incentivize chief executive officers (CEOs), such that they have a constant marginal utility per life saved. Conclusions: An executive compensation incentive that moves to eliminate tobacco use is achieved by a pay structure that increases exponentially with the number of lives saved. [ABSTRACT FROM AUTHOR]

Based on institutional and agency theories, this study investigates whether firms use environmental performance as a criterion in incentive schemes for top executives in China, where the weakness of environmental regulations is criticized, and examines the potential moderating effects of board composition on the relationship between environmental performance and top executives’ compensation. Our analysis of 687 publicly traded firms in the manufacturing industry for the period 2008–2010 finds evidence of a positive association between environmental performance and top executives’ compensation. It shows that in firms with Chief Executive Officer–chairperson duality and larger boards, there is a tighter environmental performance–pay relationship, while top executives are found to be rewarded less for environmental performance in firms whose directors hold significant ownership. The presence of independent directors is not found to exert a significant influence on the environmental performance–pay relationship. [ABSTRACT FROM PUBLISHER]

Income gains in the top 1 percent are the primary cause for the rapid growth in U.S. inequality since the late 1970s. Managers and executives of firms account for a large proportion of these top earners. Chief executive officers (CEOs), in particular, have seen their compensation increase faster than the growth in firm size. We propose that changes in the macro patterns of the distribution of CEO compensation resulted from a process of diffusion within localized networks, propagating higher pay among corporate executives. We compare three possible explanations for diffusion: director board interlocks, peer groups, and educational networks. The statistical results indicate that corporate director networks facilitate social comparisons that generate the observed pay patterns. Peer and education network effects do not survive a novel endogeneity test that we execute. A key implication is that local diffusion through executive network structures partially explains the changes in macro patterns of income distribution found in the inequality data. [ABSTRACT FROM PUBLISHER]

Groups are often tasked with making important organizational decisions. For example, CEO compensation judgments are made by groups of decision makers with no specialized compensation training who receive advice from a third party with a potential bias. This study seeks to understand the effects of this challenging context on decision making. We explore whether and how decision makers adjust their judgments, considering the potential for advisor bias. This is an essential issue in CEO compensation that is difficult to assess through traditional archival research based on publicly available data. Our study explores how decision makers, in the context of compensation committees, process and use advice provided by external parties. Our findings illustrate that individuals adjust for known conflicts of interest in the information provided to them. However, we do not find that individuals discount lavish advice to a greater extent than more modest advice, and the group decision-making process fails to correct for this tendency. [ABSTRACT FROM AUTHOR]