Remuneration committee independence and CEO remuneration for firm financial performance

Cybinski, Patricia Janina; Windsor, Carolyn

doi:10.1108/arj-08-2012-0068

Cited by 29 publications

(25 citation statements)

References 45 publications

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“…For our models that examine shareholder dissent, we include return on assets as a control because shareholders are likely to use their vote on remuneration to register their dissatisfaction with the board if performance is poor (Krause et al ., ). Finally, prior studies show differences in CEO remuneration arrangements across industry sectors and we control for industry differences (Brick et al ., ; Sapp, ; Cybinski and Windsor, ).…”

Section: Methodsmentioning

confidence: 99%

“…In these models, results for the interaction variables indicate whether adoption of the recommendations strengthens the link between CEO pay and performance. This approach is consistent with prior studies that examine the strength of the pay–performance relation (Jensen and Murphy, ; Merhebi et al ., ; Cybinski and Windsor, ). Again, because of high correlations between the variables each of the ASX recommendations is tested separately.

\begin{matrix} 0.5ex \\ left L n T o t a l C E O R e m u n e r a t i o n false/ \\ left normalΔ T o t a l C E O R e m u n e r a t i o n = β_{0} + β_{1} C o m M i n I n d e p \\ left + β_{2} C o m M a j I n d e p \\ left + β_{3} C o m A l l I n d e p \\ left + β_{4} R O A 07 x C o m M i n I n d e p \\ left + β_{5} R O A 07 x C o m M a j I n d e p \\ left + β_{6} R O A 07 x C o m A l l I n d e p \\ left + β_{7} R O A 07 + β_{8} I n s i d e r S h a r e h o l d i n g \\ left + β_{9} I n s t i t u t i o n a l S h a r e h o l d i n g \\ left + β_{10} B o a r d S i z \end{matrix}

…”

Section: Methodsmentioning

confidence: 99%

“…In relation to sample choice, we examine a diverse group of companies outside the Standard and Poor's ASX 300 (ASX 300). Prior research has focused on smaller samples of larger, more established companies (Anderson and Bizjak, ; Capezio et al ., ; Cybinski and Windsor, ). We exclude the top 300 companies because institutional theory suggests that governance choices for large companies are motivated by mimetic and coercive isomorphism, which biases them to adopt what is considered governance best practice (DiMaggio and Powell, ).…”

Section: Introductionmentioning

confidence: 99%

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Remuneration committees, shareholder dissent on CEO pay and the CEO pay–performance link

Kent

Kercher

Routledge

2016

Accounting & Finance

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We provide evidence on whether the adoption of the full Australian Securities Exchange recommendations for remuneration committee formation and structure are associated with a lower shareholder dissenting vote or a stronger CEO pay-performance link. We find some evidence that a minority-and majority-independent remuneration committee and a committee size of at least the recommended three members are associated with lower shareholder dissent. Companies with an independent committee have a stronger CEO payperformance link. In addition, a majority-independent committee strengthens the link between performance and growth in CEO pay.

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Section: Methodsmentioning

confidence: 99%

\begin{matrix} 0.5ex \\ left L n T o t a l C E O R e m u n e r a t i o n false/ \\ left normalΔ T o t a l C E O R e m u n e r a t i o n = β_{0} + β_{1} C o m M i n I n d e p \\ left + β_{2} C o m M a j I n d e p \\ left + β_{3} C o m A l l I n d e p \\ left + β_{4} R O A 07 x C o m M i n I n d e p \\ left + β_{5} R O A 07 x C o m M a j I n d e p \\ left + β_{6} R O A 07 x C o m A l l I n d e p \\ left + β_{7} R O A 07 + β_{8} I n s i d e r S h a r e h o l d i n g \\ left + β_{9} I n s t i t u t i o n a l S h a r e h o l d i n g \\ left + β_{10} B o a r d S i z \end{matrix}

…”

Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Remuneration committees, shareholder dissent on CEO pay and the CEO pay–performance link

Kent

Kercher

Routledge

2016

Accounting & Finance

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“…Previous studies (e.g. Conyon & Peck, 1998;Cotter & Silvester, 2003;Cybinski & Windsor, 2013;Daily, Johnson, Ellstrand, & Dalton, 1998;Vafeas & Theodorou, 1998;Van Essen et al, 2013) have operationalized remuneration committee independence as the percentage of independent directors on the remuneration committee, a measure that is consistent with the requirements of ASX POGCG. The same approach is used in this study.…”

Section: Remuneration Committee Compositionmentioning

confidence: 99%

Adaptive conjoint analysis: A new approach to defining corporate governance

Wright

Kilgore

2016

Corporate Governance

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Manuscript Type: EmpiricalResearch Question/Issue: The method introduced to the corporate governance literature by this paper captures the construct of corporate governance in a small number of attributes, using responses made by directors and shareholders to an adaptive conjoint analysis questionnaire.Research Findings/Insights: We demonstrate how to identify the key attributes of corporate governance from directors' and shareholders' relative preferences among a set of corporate governance attributes. The dominance of CEO duality as a relatively more important attribute is a key finding.Theoretical/Academic Implications: Adaptive conjoint analysis is a useful technique for research into governance issues characterized by constrained choice. For future researchers seeking to capture governance in a limited number of measures, we have identified four attributes considered by directors and shareholders to comprise effective corporate governance, with the single measure of CEO duality being the most important.Practitioner/Policy Implications: This parsimonious set of attributes can guide the design of future corporate governance regulations, to avoid costly over-regulation. We do not suggest that restrictions on multiple directorships or an appropriate board size should be added to current requirements, and the surprisingly low perceptions of audit partner tenure and audit committee size as important to good corporate governance suggest that these attributes could be excluded from future regulations.

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“…Authorisation provided was to avoid any kind of possible collusion between management and external auditors and compensation design for audit committee members in the way mentioned is to avoid any conflict of interest. Cybinski and Windsor (2013) in their empirical study of Australian firms reported that large firm remuneration committees link CEO total remuneration and bonuses to firm financial performance. Smaller firm remuneration committees do not link either type of CEO remuneration to performance despite remuneration committee independence.…”

Section: Board Committeesmentioning

confidence: 99%

Study on theories and mechanisms of corporate governance

Mishra

Kapil

2017

IJAAPE

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This paper aims to review the theories of corporate governance for understanding the theoretical basis of corporate governance mechanisms. Major theoretical studies on corporate governance, including studies done in emerging economies, are included in the review. The paper looks at corporate governance theories from value creation point of view. It is observed that the two perspectives of corporate governance, i.e., shareholder and stakeholder perspectives, are not in contrast to each other but are pointing towards the same goal, i.e., value creation. However, one points towards value creation for shareholders and the other points towards creation of societal value. While reviewing theoretical underpinnings and assumptions for corporate governance perspectives, due consideration has been given to the development of corporate governance mechanism based on various existing theories. A theoretical framework for understanding the relationship between corporate governance mechanism and corporate performance has been proposed. Emerging challenges for corporate governance theories have also been indicated. This being a review paper, one of the major limitations is an unintentional omission of some literature because of non-availability or non-reachability. Literature that would have been present in languages other than English could also not been included in the review.

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Remuneration committee independence and CEO remuneration for firm financial performance

Cited by 29 publications

References 45 publications

Remuneration committees, shareholder dissent on CEO pay and the CEO pay–performance link

Remuneration committees, shareholder dissent on CEO pay and the CEO pay–performance link

Adaptive conjoint analysis: A new approach to defining corporate governance

Study on theories and mechanisms of corporate governance

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