Executive remuneration determinants: New evidence from meta-analysis

Abstract

This meta-analysis takes stock of 121 C.E.O. pay studies published between 1998 and 2018 with the objective of identifying the main drivers of C.E.O. pay from a global perspective and contributing to the agency vs managerial debate on this ground. The meta-results disclose a positive C.E.O. pay-performance correlation (the highest correlation coefficient corresponds to Earnings per share with a 34%) as the agency theory prescribes and the governance policies promote. However, firm size still predominates as the main driver of C.E.O. pay (correlation coefficient is around 44%) according to managerial premises. Moreover, our results reconcile both approaches because results of the meta-regressions suggest that larger companies and more independent boards strengthen the pay-performance association. Additional analyses of moderating factors on C.E.O. pay forces do not provide robust conclusions, though, they suggest: (1) weak impact, if any, of both the Cadbury Report and the S.O.X.; and (2) lack of homogeneity in the banking industry despite its specific regulation. ARTICLE HISTORY

Reflections of Corporate Governance on Pay-Performance Sensitivity: A New Perspective

“…Zoghlami (2020) emphasized that firm performance may be reached through reforms on incentives of executive compensation aligned to the structure of corporate governance. Blanes, Fuentes, and Porcuna (2020) pointed out that the CEO's remuneration is sensitive to performance variations in both the accounting and market approaches.…”

CEO Compensation in Korea: Is It Different than in the US? A Comparison between Korean Non-Life Insurance Firms and US Property-Liability Insurance Firms

“…Van Essen et al (2015) provide evidence on the effect of managerial power on CEO pay by showing that when CEOs have power over the pay setting process, they tend to receive higher compensation, whereas when boards have more power than CEOs, CEOs are likely to get lower compensation. Blanes et al (2020) find a positive association between CEO pay and firm performance, and they point out that firm size is the main driver of CEO compensation.…”

Behavioural investigation of the impact of different types of CEOs on innovation in family firms: moderating role of ownership divergence between cash flow rights and voting rights

“…The amount of stock owned by individual investors and large-block shareholders (Blanes et al, 2020). ROE Net earnings divided by equity at previous year end (Jiang et al, 2020).…”