CEO Compensation: Does Financial Crisis Matter?

Vemala, Prasad; Nguyen, Lam; Nguyen, Dung; Kommasani, Alekhya

doi:10.5539/ibr.v7n4p125

Cited by 16 publications

(12 citation statements)

References 35 publications

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“…As part of the analysis, we also assess the influence of board composition and the way these factors have been changing over time, particularly pre and post financial crisis. [30]. They, however, also found that while total compensation increased during and after the 2008 financial crisis, cash compensation decreased.…”

Section: Ceo Compensation and Mergers And Divestituresmentioning

confidence: 92%

Determinants of CEO Compensation before and after the Financial Crisis

Sonenshine¹,

Larson²,

Cauvel³

2016

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This paper revisits the determinants of CEO compensation using recent data (covering 125 firms from 2003 to 2012). We focus in particular on how CEO pay changed after the 2008 financial crisis. Post-crisis, the composition of pay shifted away from cash toward equity. Furthermore, post-crisis pay is tied more closely to performance and less closely to factors (like firm size) that are more tenuously connected to shareholder value. We also investigate the impact of mergers and divestitures on CEO pay, overall and before and after the crisis. Finally, we consider the role that board composition plays in CEO compensation and find that CEOs take larger post-crisis pay cuts when they have more employees on their boards.

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Section: Ceo Compensation and Mergers And Divestituresmentioning

confidence: 92%

Determinants of CEO Compensation before and after the Financial Crisis

Sonenshine¹,

Larson²,

Cauvel³

2016

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“…For example, Ozkan (2011) studied a sample of 390 UK non-financial companies from 1999 to 2005 and found a pay-performance elasticity of 0.075 and 0.095 for CEO cash and total direct compensation (that is, for every 10% increase in shareholder wealth, CEO cash or total direct compensation increased 0.75% or 0.95%). Vemala et al (2014) studied the effect of the 2008 financial crisis on CEO compensation. Using a sample of 249 Fortune-500 firms and 2241 observations over the period from 2004 to 2012, firm performance was found to have a significant effect on CEO compensation both pre-and post-crisis.…”

Section: Theory and Research Evidence On Firm Size Performance Andmentioning

confidence: 99%

“…Furthermore, executive compensation levels and structure in Canada have changed significantly in the last 20 years because of, among other things, drastic changes in the economic environment (such as the dot-com bubble and the 2008 financial crisis), increasing social and shareholder pressure, and governance requirements (Chowdbury & Wang, 2009;Gélinas & Baillargeon, 2013;Vemala, Nguyen, Nguyen, & Kommasani, 2014). For example, during the five-year period covered by Zhou (2000), only about half of the CEOs received stock options and the use of stock options was considered as a pay-forperformance tool.…”

Section: Introductionmentioning

confidence: 99%

The effects of firm size and firm performance on CEO pay in Canada: A Re‐Examination and Extension

2019

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Using insights from academic and practitioners' perspectives and recent data, this paper extends the literature by using pay variables that are typically used by practitioners, including those not studied in previous academic research. Consistent with previous findings, firm size, measured by three‐year average revenues, has strong effects on CEO pay. However, the relationship is not the same for firms of different sizes. Revenue elasticity is strong among small companies and disappears for medium and large companies. Firm performance, measured by accounting‐based measures (return on assets and return on equity), and market‐based measures (total shareholder return and shareholder value), have little effects on CEO cash compensation, but strong positive effects on equity compensation. Implications for research and practice are discussed.

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“…(number of shares outstanding x Closing Price) + DEBT According to research [15], [16] found that the higher the value of the company the greater the compensation of the CEO. [17], [18] revealed that firm value positively affects executive compensation.…”

Section: Company Valuementioning

confidence: 99%

Influence of Financial Performance, Value of Company, Corporate Governance Mechanism For Executive Compensation

Retnoningsih¹,

Mahanani²

2019

Proceedings of the 3rd Annual International Seminar and Conference on Global Issues (ISCoGI 2017)

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This study explains the effect of corporate performance, corporate values and corporate governance mechanisms on executive compensation. The sample is 16 firms listed in the manufacturing company for the period of 2010-2016 (112 research data).Results of F test show that the regression model used to determine the ROA variable (X 1 ), Tobin's Q (X 2 ), Institutional ownership (X 3 ) on Executive Compensation (Y) is jointly influential, so the proposed hypothesis is proved true. Result of F test 20,275 with p value (sig.) Equal to 0.000 which is much smaller 5% (0.05). The regression model in this study indicates that the independent variables are able to explain the Executive compensation by 36%. Based on t test result, it is found that ROA (X1) variable has no effect on execitive compensation, Tobin's Q (X2), Institutional Ownership (X3), which significantly influence Executive Compensation (Y). Keyword-Return on Asset (ROA); corporate values (Tobin's Q); Mechanism of Corporate Governance (Institutional Ownership); Executive CompensationI.

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CEO Compensation: Does Financial Crisis Matter?

Cited by 16 publications

References 35 publications

Determinants of CEO Compensation before and after the Financial Crisis

Determinants of CEO Compensation before and after the Financial Crisis

The effects of firm size and firm performance on CEO pay in Canada: A Re‐Examination and Extension

Influence of Financial Performance, Value of Company, Corporate Governance Mechanism For Executive Compensation

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