Executive Compensation: Balancing Competing Priorities

Brown, Michelle; Samson, Danny

doi:10.1111/1467-8462.00291

Cited by 3 publications

(2 citation statements)

References 19 publications

(24 reference statements)

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“…The issue of executive and director's pay has attracted the interest of both the Australian public and policy makers (Woldring 1995; Hill and Myablon 2002; and Brown and Samson 2003). Understandably, it has attracted also the interest of the Australian Stock Exchange (ASX).…”

Section: Introductionmentioning

confidence: 99%

Directors' Remuneration and Performance in Australian Banking

Doucouliagos

Haman

Askary

2007

Corporate Governance

107

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This paper explores the relationship between directors' pay and performance within Australian banking, using panel data for the 1992-2005 period. The relationship between CEO pay and performance is investigated also. Several earnings models are estimated, using different dependent variables, alternate measures of performance and different estimation techniques. The results indicate an absence of a contemporaneous relationship between directors' pay and bank performance, and no association with prior year performance. However, there is a more distant pay-performance relationship, with total directors' pay having a robust positive association with earnings per share lagged two years, as well as with ROE lagged two years. The other key determinants of directors' pay in Australian banking are bank specific managerial policies, lags in the administration of pay, bank size, directors' age and directors' stock ownership. In contrast to total directors' pay, the evidence confirms a strong positive and direct association between CEO remuneration and prior year bank performance. The pay-performance association is stronger and more direct for CEO remuneration than it is for total directors' remuneration. The responsiveness of CEO pay with respect to bank performance appears to have increased over time. Copyright (c) 2007 The Authors; Journal compilation (c) 2007 Blackwell Publishing Ltd.

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Section: Introductionmentioning

confidence: 99%

Directors' Remuneration and Performance in Australian Banking

Doucouliagos

Haman

Askary

2007

Corporate Governance

107

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“…Brown and Samson (2003), summarise the 'scope and complexity' of the CEOs role as: set strategy; ensure senior and middle managers are great performers; lead (inspire the whole organisation); manage a variety of stakeholders relationships (government, shareholders, unions, staff and customers); ensure compliance with a myriad of laws; set and implement ethical standards; manage performance; manage risk; manage competitiveness and performance; set and be the 'image' of the organisation;…”

Section: The Pay-performance Relationmentioning

confidence: 99%

Executive Remuneration: Achieving Accountability through Disclosure

Beaumont¹

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Executives’ remuneration and company performance: An evaluation

Azim¹,

Mei²,

Rahman³

2011

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Executive pay became a much discussed issue during the recent global financial crisis. Substantial research has been done in the United States and United Kingdom, while research in Australia is still limited, especially in terms of using the data for the financial crisis. This paper will investigate the relationship between Australian executives’ remuneration and their companies’ performance during the global financial crisis. Two approaches were used to examine the relationship: firstly, an investigation of the pay-for performance relationship that existed during the global financial crisis; and secondly, checking the robustness test by using one year before-and-after data. The sample is taken from the Top 200 companies from the Australian Stock Exchange (ASX) list for 2007 and 2008. In order to achieve a better understanding of this relationship, a conceptual model has been developed. Results show that Australia’s business reward system is quite effective because executives’ remuneration were reduced by their respective companies when they underperformed during this particular crisis. Overall, this study concludes that there is a positive and significant relationship between executives’ remuneration and company performance during the global financial crisis, with higher sensitivity to market-based performance measures than accounting-based performance measures.

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Executive Compensation: Balancing Competing Priorities

Cited by 3 publications

References 19 publications

Directors' Remuneration and Performance in Australian Banking

Directors' Remuneration and Performance in Australian Banking

Executive Remuneration: Achieving Accountability through Disclosure

Executives’ remuneration and company performance: An evaluation

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