Powerful Chief Executive Officers and Firm Performance: Integrating Agency and Stewardship Theory

Qiao, Penghua; Fung, Anna; Miao, Jianchun; Fung, Hung‐Gay

doi:10.1111/cwe.12223

Cited by 16 publications

(17 citation statements)

References 48 publications

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“…substantial power and discretion (Lin, 2005). Qiao, Fung, Miao, and Fung (2017) confirmed that executive managers act as stewards to the benefit of their firms. Unlike in agency theory, CEOs are considered as efficacious company stewards whose objectives are consistent with those of owners.…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 88%

Ownership Structure and CEO Compensation: Evidence from Jordan

Al-Al-Msiedeen

Sawalqa

2021

Asian Economic and Financial Review

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The current study examines the effect of ownership structure (i.e., government ownership, family ownership, and foreign ownership) on chief executive officer (CEO) compensation in an emerging market, by considering Jordan as a case study. By using a sample of 136 non-financial firms listed on the Amman Stock Exchange over the period of 2015-2019, we find that family ownership has a positive and significant impact on CEO compensation. The finding regarding foreign ownership is contrary to expectations, with a higher foreign ownership reflecting a higher CEO compensation. Overall, these results imply that the ownership structure of Jordanian companies exerts a significant influence on the CEO pay setting process. However, government ownership has no relationship with CEO compensation. This indicates that government ownership is ineffective in determining CEO compensation. We further find that firm size is positively related to CEO compensation, indicating that larger companies have more ability to generate high internal funding, and can afford to pay higher compensation to quality managerial talent. In contrast, the effects of firm age and liquidity are not at significant levels. Contribution/ Originality:This study contributes to the existing literature by recognizing the interests of regulators, readers, practitioners, and academics to gain more insight into and knowledge of corporate governance practices in an emerging market, such as Jordan. INTRODUCTIONRecently, there has been global debate on CEOs in the corporate governance literature, including how ownership structure might affect CEO compensation (Baixauli-Soler & Sanchez-Marin, 2015; Cheung, Stouraitis, &

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Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 88%

Ownership Structure and CEO Compensation: Evidence from Jordan

Al-Al-Msiedeen

Sawalqa

2021

Asian Economic and Financial Review

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“…Firms listed for less than one year are excluded. To minimize the impact of outliers, we follow common practice in the literature and winsorize all variables at the 1st and 99th percentiles (i.e., [1,23]). Our final sample consists of 2,597 firm-year observations.…”

Section: Methodology and Datamentioning

confidence: 99%

“…From an upper echelons perspective, chief executive officers' (CEOs) behaviors influence corporate policy and play an important role in driving firm's behaviors [1]. Prior studies have examined that corporate governance (i.e., board of directors and independent directors) or external normative values (i.e., institutional environment) affect green technological innovation decision [2][3][4][5][6].…”

Section: Introductionmentioning

confidence: 99%

CEO Media Exposure and Green Technological Innovation Decision: Evidence from Chinese Polluting Firms

Wang

Zhang

et al. 2020

Mathematical Problems in Engineering

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The upper echelons theory is utilized to establish how CEO’s attributes affect firm’s technological innovation decisions. The extant literature has largely ignored the impacts of CEO media exposure. An unbalanced panel data analysis is used to examine the effects of CEO media exposure on Chinese polluting firm’s green technological innovation. It is illustrated that CEO media exposure generally enhances Chinese polluting firms’ green technological innovation decisions. In addition, we find that firms with state ownership and environmental regulations all moderate positively the relationship between CEO media exposure and green technological innovation. The research suggests that CEO media exposure appears to be a stimulus to firm’s green technological innovation decisions.

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“…In strategic decision-making, a powerful CEO will regroup the "ally" to support his/her divestiture decision. With no significant contest from other board members, the firm operationalizes divestiture effectively and productively, resulting in higher performance (Qiao et al, 2017).…”

Section: Power Circulation Theorymentioning

confidence: 99%

Divestiture strategy, CEO power and firm performance

You

Yong

2020

MRR

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Purpose This study aims to examine the moderating role of chief executive officer (CEO) power on the relationship between divestiture strategy and firm performance by framing the relationship under the agency and power circulation theories. Design/methodology/approach This study focuses on a sample of 319 non-financial public-listed companies in Malaysia from the year 2012–2016 and estimates the model under two-step generalized method of moments panel regression to eliminate the endogeneity issue. Findings The results show that divestiture strategy decreased the firm performance. Meanwhile, greater CEO power changed that divestiture effect but still failed to increase the performance. This study also indicates the CEO power strengthens the relationship between firm performance and divestiture. Research limitations/implications The overall findings show that the positive moderating role of CEO power on the relationship between divestiture and performance. This research confirmed the agency and power circulation theories by showing that CEO power can make divestiture strategy works. However, the moderating plot tells different. CEO power may strengthen the relationship between divestiture and performance; it fails to boost up the performance in overall. Therefore, this study is about CEO power on the strategic decision and gives a good implication for corporate governance concerning the impact of CEO power on the organization’s alignment process. Originality/value This study examines the effect of CEO power on the performance of divestiture strategy implementation by contesting the agency and power circulation theories within an emerging country context.

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Powerful Chief Executive Officers and Firm Performance: Integrating Agency and Stewardship Theory

Cited by 16 publications

References 48 publications

Ownership Structure and CEO Compensation: Evidence from Jordan

Ownership Structure and CEO Compensation: Evidence from Jordan

CEO Media Exposure and Green Technological Innovation Decision: Evidence from Chinese Polluting Firms

Divestiture strategy, CEO power and firm performance

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