Executive compensation and capital structure

Liu, Sheen; Qi, Howard; Xie, Yan Alice

doi:10.1080/00036846.2019.1659927

Cited by 8 publications

(7 citation statements)

References 35 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Moreover, lenders put restrictions on firms not to aggressively compensate the CEOs and to maintain sufficient funds to satisfy the contractual obligations as they become due (Teti et al , 2017). The negative relation between leverage and compensation confirms the finding of Liu et al (2020). The notable finding of this study is that leverage is positively related to CEO compensation in engineering and fuel & energy sectors.…”

Section: Discussionsupporting

confidence: 85%

See 1 more Smart Citation

Determinants of CEO compensation: evidence from Pakistan

Khursheed

Sheikh

2022

View full text Add to dashboard Cite

Purpose The purpose of this paper is to investigate the impact of firm-specific (i.e. firm size, profitability, leverage, dividend, growth opportunities, management quality and firm age) and country-specific (i.e., gross domestic product [GDP] growth) variables on compensation/remuneration offered to chief executive officers (CEOs) working in different industries of Pakistan. Design/methodology/approach Panel data techniques, namely, pooled ordinary least squares, fixed effects and random effects methods are used to estimate the results. Moreover, Hausman test is used to choose which estimation method, either fixed effects or random effects, is better to explain the results. Findings Firm size, profitability, leverage, growth opportunities and age are some important firm-specific factors that have mixed (i.e. positive/negative) impact on CEO compensation in different industries. Variations in results are due to industry dynamics. However, it is important to mention that three key variables, namely, dividend, management quality and GDP growth have shown consistent positive impact on CEO compensation in most of the industries. In sum, results show that firm-specific and country-specific variables have material effects on CEO compensation. Moreover, results are found consistent with the predictions of agency theory and human capital theory. Practical implications The authors are sure that findings of this study provide some support to the board of directors to determine the pay slice for CEOs. Moreover, findings provide support to the regulatory authorities in formulating mechanisms to determine the compensation package for CEOs working in different industries and to improve the Code of Corporate Governance. Originality/value To the best of the authors’ knowledge, no empirical study in Pakistan has yet estimated the effects of firm-specific and country-specific variables on compensation offered to CEOs working in different industries. Thus, industry-wise analysis provides some new insights to the decision-makers and lays some foundation upon which a more detail analysis could be based.

show abstract

Section: Discussionsupporting

confidence: 85%

“…In contrast, findings of Olaniyi (2019) show that leverage is positively related to CEO remuneration in Nigerian firms. Findings of Liu et al (2020)…”

Section: Leveragementioning

confidence: 99%

Determinants of CEO compensation: evidence from Pakistan

Khursheed

Sheikh

2022

View full text Add to dashboard Cite

show abstract

“…These findings are not completely consistent with previous studies. Liu et al (2020) report that executive compensation provides a strong incentive for CEOs to choose high firm leverage. Adu-Ameyaw et al (2021) also find that managerial cash bonus compensation is negatively and significantly related to financial leverage.…”

Section: Discussionmentioning

confidence: 99%

Executive compensation and the financial performance of Polish listed companies from the corporate governance perspective

Sajnóg

Rogozińska–Pawełczyk

2022

View full text Add to dashboard Cite

Research background: The level of compensation earned by CEOs and the relationship between executive pay and companies? performance is one of the most widely studied issues in the corporate governance literature. Studies conducted in the last several decades have provided evidence that CEO pay should be aligned with accounting financial measures. Purpose of the article: The main purpose of this paper is to determine the relationship between executive compensation and organizational financial performance. In particular, the effect of net income and comprehensive income as the accounting measures of financial performance on executive compensation is compared. Methods: The research comprised listed companies on the Warsaw Stock Exchange (WSE). The role and effect of accounting financial measures on executive compensation are analyzed based on three regression models. The period of analysis spanned ten years, from 2009 to 2018. Findings & value added: There are three conclusions that can be drawn from the study. Firstly, executive compensation in the analyzed companies largely depends on the accounting measures of financial performance, based on net income and comprehensive income (excluding ROE). Secondly, its level is significantly and positively influenced by the company?s size, Tobin?s Q ratio, debt ratio, and dividend rate. Thirdly, comprehensive income has a stronger effect on executive compensation than net income. Our findings add some potentially noteworthy dimensions to the economic literature on corporate governance, which is especially important to apply in the CEE region and other emerging economies. The Anglo-American assumption of corporate governance and executive compensation policy might not be suitable for the realities in much of the world.

show abstract

“…This essential feature justifies that companies display a weaker willingness to readjust leverage by choosing a slower pace and smaller size of adjustment [11]. On the other hand, Liu et al (2019) [12] showed that executive compensation motivates CEOs to pursue more aggressive capital structure policy. Even so, the larger leverage is due to better access to debt, which results in lower rebalancing costs [13].…”

Section: -Introductionmentioning

confidence: 99%

Explanatory Factors of the Capital Structure

Silva¹,

Gomes

Lopes

2020

Emerg Sci J

View full text Add to dashboard Cite

This paper presents an empirical study of the capital structure of Portuguese companies where the main objective is to find key explanatory factors for indebtedness decisions. The relations between indebtedness and its determinants are tested in the light of the Trade-Off Theory and the Pecking-Order Theory. The motivation of this work was to contribute to the scientific research on the influential determinants of the capital structure and to deepen the knowledge of the Portuguese market. The quantitative methodology is used, through an econometric model for panel data using accounting information of 55 Portuguese companies between 2014 and 2016. Statistical tests such as the F test, the Lagrange Multiplier Breusch-Pagan test and the Hausman test were used to identify the most appropriate method of estimation, which resulted in a panel data model with random effects for individuals. The findings of this study suggest that indebtedness have a positive relation with tangibility and the size of the company, which supports the Trade-Off Theory. However, the positive relationship with the non-debt tax benefits suggests the importance of taxes, contrary to Trade-Off Theory. The negative relationship with cash flows, coupled with the positive relationships between size and growth opportunities, suggest the use of funding only when internal funds become insufficient, supporting the Pecking-Order Theory. The general results support that both theories partially explain the financing decisions of Portuguese companies. Doi: 10.28991/esj-2020-01249 Full Text: PDF

show abstract

Executive compensation and capital structure

Cited by 8 publications

References 35 publications

Determinants of CEO compensation: evidence from Pakistan

Determinants of CEO compensation: evidence from Pakistan

Executive compensation and the financial performance of Polish listed companies from the corporate governance perspective

Explanatory Factors of the Capital Structure

Contact Info

Product

Resources

About