Do corporate governance mechanisms influence CEO compensation? An empirical investigation of UK companies

Ozkan, Neslihan

doi:10.1016/j.mulfin.2006.08.002

Cited by 193 publications

(219 citation statements)

References 20 publications

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“…He used the data sample of 414 UK based firms for the year 2003 and 2004. The result shows that firms with larger board size and a higher Percentage of independent directors have positive and significant effect on CEO compensation level (Ozkan, 2007).…”

Section: Independent Directors and Ceo Compensationmentioning

confidence: 89%

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Determinants of CEO Compensation Evidence from UK Public Limited Companies

Buigut¹,

Soi²,

Koskei³

2014

IJBM

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In spite of more research on CEO compensation, where more of this research is anchored in agency or managerialist perspectives, less has been done on its determinants in firms. This paper contributes to the literature by determining the effect of Independent directors, CEO ownership and Profitability on executive cash compensation in UK. Agency theory informed the study. The study adopted an explanatory design Census technique was used as the study only included all the 20 firms for the past 3 years from 2008-2010. The study findings have shown that CEO ownership has a positive and significant effect on CEO compensation. The results have also show that the percentage of independent directors is significantly related to a decrease in the compensation levels of CEO compensation. Firm profitability was positively related to CEO compensation positing that CEOs salary as well as compensation increased with an increase in firm performance. It is therefore imperative for firms to link reward to corporate and individual performance so as to counter the agency problems. The interaction between corporate governance and CEO compensation is an avenue for more research for instance the relationship between shareholders and CEO compensation.

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Section: Independent Directors and Ceo Compensationmentioning

confidence: 89%

“…Another study conducted by Neslihan Ozkan (2007) about corporate governance mechanism influence upon the level of CEO compensation. He used the data sample of 414 UK based firms for the year 2003 and 2004.…”

Section: Independent Directors and Ceo Compensationmentioning

confidence: 99%

Determinants of CEO Compensation Evidence from UK Public Limited Companies

Buigut¹,

Soi²,

Koskei³

2014

IJBM

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“…Even though the economic theories of efficient compensation forecast a positive relationship between company performance and executive remuneration, the efforts of researchers to document this relationship have been mostly unsuccessful. O'Neill and Iob (1999) and Ozkan (2007) found little evidence to suggest any consistent relationship between executive remuneration and measures of performance. This may imply that executives are still rewarded with remuneration packages out of proportion to their efforts and the performance of their companies.…”

Section: Introductionmentioning

confidence: 95%

The relationship between remuneration and financial performance for companies listed on the Johannesburg Stock Exchange

Kirsten

Toit

2018

SAJEMS

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Background: The executive directors of a company are the agents of the shareholders and should manage the company in the best interest of the shareholders, not only for personal gain. It is therefore important for companies to ensure that they implement remuneration policies which will result in motivated employees who will execute decisions and actions which are in the best interest of the shareholders. However, it is widely acknowledged that the relationship between company performance and executive remuneration is weak. This implies that executives are still rewarded excessive remuneration regardless of the performance of their companies. Aim: The purpose of this study was to determine whether a relationship exists between the performance-based remuneration of executive directors and the financial performance of South African companies. Setting: The study was conducted in South Africa, specifically on companies listed on the Johannesburg Stock Exchange. Methods: The study design was quantitative and made use of a Pearson correlation and generalised least squares regression with bootstrapping at a 95% confidence interval to analyse the relationship between executive director remuneration and the financial performance of 42 companies in the consumer goods and services industry of the Johannesburg Stock Exchange (JSE) from 2006 to 2015. Results: The study established that the remuneration policies in place for South African executive directors within the consumer goods and services industry seem to be affected by the share price of the company. Conclusion: In the South African environment, executive director remuneration is thus not directly related to profitability or company size, as was the case in some earlier studies. The link between executive director remuneration and share performance may be an indication that remuneration policies are based on the share price and are thus directly connected to the principle of shareholder wealth maximisation.

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“…For example, Ozkan (2006) argues that institutional investors have a key role in monitoring firms as they manage and control significant amounts of funds. In the same vein, Jensen (1986), Pound (1988) and Tong and Ning (2004) suggest that institutional owners can effectively monitor firms and can alleviate agency costs.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Does ownership matter in publicly listed tourism firms? Evidence from Jordan

Al‐Najjar

2015

Tourism Management

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This paper aims to provide new evidence on the relationship between ownership structure and firm performance. Unlike the previous empirical studies in the area of firm performance, we examine this relationship within a unique setting of publicly listed tourism firms. Our contribution is extended by investigating this relationship in Jordan as an emerging market and a famous tourist destination in the region. This is an interesting setting since ownership is more concentrated in the investigated firms. Our results show that institutional investors are self-opportunistic and negatively affect firm performance. In addition, we report a negative relationship between foreign ownership and firm performance. Furthermore, we detect that mutual funds have a positive impact on firm performance. Finally, the findings of this paper provide interesting empirical implications to academics and policy makers.

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Do corporate governance mechanisms influence CEO compensation? An empirical investigation of UK companies

Cited by 193 publications

References 20 publications

Determinants of CEO Compensation Evidence from UK Public Limited Companies

Determinants of CEO Compensation Evidence from UK Public Limited Companies

The relationship between remuneration and financial performance for companies listed on the Johannesburg Stock Exchange

Does ownership matter in publicly listed tourism firms? Evidence from Jordan

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