Remuneration Committees’ Gender Composition as a Determinant of Executive Board Compensation Structure

Abstract

This paper investigates the relationship between the gender composition of firms' remuneration committees and the relative weight of variable monetary compensation in these firms' top executives' compensation packages. Previous archival research into executive compensation has mainly relied on agency theory, managerial power theory and tournament models to construct its theoretical frameworks. However, both psychological and corporate governance-related research concerning gender differences in, for instance, risk-and inequality-aversion, suggest that the gender variable should be included in the academic debate on executive compensation.Controlling for size, industry, and corporate governance variables, this paper uses simple least squares analysis to regress measures of the relative weight of variable compensation against measures of female presence in remuneration committees, in a sample of 25 806 fiscal year/executive combinations. This regression is repeated in a multilevel model that controls for firm fixed effects in a sample of 9048 fiscal year / executive combinations. The results indicate that a female presence in the remuneration committee is negatively associated with the relative weight of the annual bonus in top executives' compensation contracts.

Executive compensation and the financial performance of Polish listed companies from the corporate governance perspective

“…Additionally, three binary variables were used in the econometric models: − SECTOR -indicating a company's specific sector and taking a value of 1 for financial companies and a value of 0 for other sectors (Yamina & Mohamed, 2017), − GENDER -identifying gender diversity among CEOs, which influences EC (Borrenbergs et al, 2017); it takes a value of 0 for a male-only group of CEOs and 1 for companies in which at least one CEO is a woman, − NEG -to distinguish between periods when a company made profits and when it incurred losses as recommended by conditional conservatism (Basu, 1997); it takes a value of 1 for a loss and 0 for a profit. The comparison of CI and NI in terms of their associations with executive compensation was performed using a three-step procedure.…”

Gender Diversity on Boards of Directors and Remuneration Committees: The Influence on Listed Companies in Spain

“…This scarce but emerging literature investigates mainly whether top management pay and corporate performance are more aligned in companies with gender-diverse compensation committees, leading to mixed results. The study by Borrenbergs et al ( 2017 ), investigates the relationship between female presence in the remuneration committee and the relative weight of performance contingent pay for top executives. The findings, based on a detailed analysis of a sample of public US and Canadian firms, show strong evidence supporting the fact that gender-diverse compensation committees are associated with lower levels of annual bonuses in top executives' remuneration contracts (variable short-term compensation).…”

The Impact of Firm Financial Efficiency on Executive Compensation of United States Apparel Stores Industry: An Application of Panel Data Envelopment Analysis

“…Other Scholars (e.g. Smith, Smith, & Verner, 2011;Borrenbergs, Vieira, & Georgakopoulos, 2017) have reported similar proportions of female CEOs in other countries. We, therefore, re-run our pay models after including a dummy that represents female CEOs and find almost identical results (not reported).…”