Ownership concentration and sensitivity of executive pay to accounting performance measures: Evidence from publicly and privately-held insurance companies

Ke, Bin; Petroni, Kathy R.; Safieddine, Assem

doi:10.1016/s0165-4101(99)00021-x

Cited by 162 publications

(82 citation statements)

References 38 publications

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“…They could pay more attention on direct controlling and thus less attention by financial figures (e.g. Holmstrom 1979; Ke, Petroni & Safieddine, 1999;Prendergast, 2002). Nevertheless, it's reported that institutional investors are characterized by some studies as sophisticated and as policy-setters in capital markets (Bartov, Gul, & Tsui, 2000;Chakravarty, 2001).…”

Section: The Relation Between Ownership Structure and Accounting Consmentioning

confidence: 99%

“…In addition, institutional investors probably have an advantage access to inside and management information (Carleton, Nelson & Weisbach, 1998). Holmstrom (1979), Ke, Petroni and Safieddine (1999) and Prendergast (2002) argued that institutional investors may depend more on direct controlling and less monitoring by financial numbers. On the other hand, prior studies reported that institutional ownership is more likely to monitor the managers' behaviors through using conservative accounting policies in financial reports (Ramalingegowda & Yu, 2012).…”

Section: Introductionmentioning

confidence: 99%

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The Influence of Corporate Ownership Structure and Board Members’ Skills on the Accounting Conservatism: Evidence from Non-Financial Listed Firms in Amman Stock Exchange

Al-Sraheen¹,

Fadzil²,

Ismail³

2014

ijafr

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The purpose of the current study is to examine the influence of ownership structure and board members' skills in the practice of accounting conservatism of Jordanian listed firms. The data were obtained from the annual reports of 116 Jordanian listed firms for year 2011. By using the multiple regression analysis, the results show that the influence of corporate ownership structure and board skills on accounting conservatism were somewhat varied. All variables were a positive relationship with the conservatism with the exception of the board multiple ISSN 2162-3082 2014 www.macrothink.org/ijafr 178 directorship which has negative relationship with conservatism. Five hypotheses were developed and offered in this paper, institutional ownership and board financial expertise were supported, while family ownership, board tenure and board multiple directorships were not supported due to the higher level of P-value compared to 0.05. These results refer that corporate governance plays a vital role in enhancing the level of conservatism and reducing the agency conflict. Further, regulators bodies in Jordan should increase the effectiveness role of corporate governance in Jordanian companies in order to enhance the quality of financial reports. In addition, this study opens up avenues for more studies on accounting conservatism not only in Jordan, but also in other countries where this area of study is lacking. International Journal of Accounting and Financial Reporting

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Section: The Relation Between Ownership Structure and Accounting Consmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Influence of Corporate Ownership Structure and Board Members’ Skills on the Accounting Conservatism: Evidence from Non-Financial Listed Firms in Amman Stock Exchange

Al-Sraheen¹,

Fadzil²,

Ismail³

2014

ijafr

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“…Specific examples of such reform efforts include the mandatory adoption of a 50% outside director ratio, audit committee, and outside director nomination committee for firms with book asset size greater than 2 trillion, the adoption of 29 There is a growing literature on the link between ownership structure and executive compensation in advanced industrialized nations. See, for example, Core, Holthausen, and Larcker (1999), Ke, Petroni, and Safieddine (1999), Harvey and Shrieves (2001), Bertrand andMullainathan (2001), Cyert, Kang andKumar (2002) and Hartzell and Starks (2003) for the U.S.; Conyon (1997), Cosh and Hugh (1997), and Cragg and Dyck (2003) for the U.K.; Kato (1997) for Japan; Elston and Goldberg (2002) for Germany;and Randoy and Nielsen (2002) for Norway and Sweden. For transition economies, see for instance, Kato (1996, 1998) for Bulgaria, Jones and Mygind (2004) for Estonia, and Kato and Long (2004) for China.…”

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confidence: 99%

Executive compensation, firm performance, and Chaebols in Korea: Evidence from new panel data

Kato

Kim²,

Lee³

2007

Pacific-Basin Finance Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper provides the first rigorous econometric estimates on the pay-performance relations for executives of Korean firms with and without Chaebol affiliation. To do so, we have assembled for the first time panel data (that provide information not only on executive compensation and firm performance but also on Chaebol affiliation) for 246 firms that were included in KOSPI200 for at least two consecutive years from 1998 to 2001. Contrary to a popular belief that Korean corporate governance and the structure of Korean executive compensation is considerably different from elsewhere in the West, we find that cash compensation of Korean executives is statistically significantly related to stock market performance and that the magnitude of the sensitivity of pay to stock market performance is comparable to the U.S. and Japan. Perhaps even more importantly, further analysis reveals for the first time that such overall significant executive pay-performance link is driven by nonChaebol firms and that no such link exists for Chaebol firms. The evidence is consistent with the recent literature on the nature of Chaebols in Korea and the current corporate governance reform efforts in Korea that are aimed mostly at Chaebol firms. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: M52, M12, G30, G15, J33, O53

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“…4 3 On the other hand, recent studies suggest that the monitoring by banks has been largely ineffective (e.g., Hanazaki and Horiuchi, 2000). 4 The study that comes closest to doing so is Ke et al (1999) which compares the CEO pay-performance sensitivity in publicly-and privately-owned insurance companies. They find that pay-performance sensitivity is significantly smaller in privately-owned insurance firms, suggesting that the CEO's in such firms may be monitored not only through the firms' financial performance, but…”

mentioning

confidence: 99%

Executive pay in Japan: the role of bank-appointed monitors and the Main Bank relationship

Abe

Gaston

Kubo

2005

Japan and the World Economy

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The tournament model has the feature that executive compensation depends on the wages paid to workers at lower levels of the corporate hierarchy. The agency model shows that compensation based on firm performance is a means by which incentives can be provided to executives once a promotion tournament has been resolved. In this paper, we combine aspects of both models and show that the existence of an outsider who monitors the firm's activities will lower the sensitivity of pay to firm performance for top executives and reduce the importance of tournament-based incentives. Using panel data for 56 Japanese electronics firms, we find support for the notion that bank-appointed Board members help monitor top executives and that tournament considerations are a particularly important feature of executive compensation in Japan.

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Ownership concentration and sensitivity of executive pay to accounting performance measures: Evidence from publicly and privately-held insurance companies

Cited by 162 publications

References 38 publications

The Influence of Corporate Ownership Structure and Board Members’ Skills on the Accounting Conservatism: Evidence from Non-Financial Listed Firms in Amman Stock Exchange

The Influence of Corporate Ownership Structure and Board Members’ Skills on the Accounting Conservatism: Evidence from Non-Financial Listed Firms in Amman Stock Exchange

Executive compensation, firm performance, and Chaebols in Korea: Evidence from new panel data

Executive pay in Japan: the role of bank-appointed monitors and the Main Bank relationship

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