Remuneration committees, shareholder dissent on <scp>CEO</scp> pay and the <scp>CEO</scp> pay–performance link

Kent, P. W.; Kercher, Kim; Routledge, James

doi:10.1111/acfi.12222

Cited by 25 publications

(34 citation statements)

References 97 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Board size reports a median of six directors, and therefore, we code a 1 for companies with six or more directors (large board size) and a 0 for companies with less than six directors (small board size) (Koh et al ., ; Ahmed and Henry, ; Christensen et al ., ). Companies with a dual CEO and chairperson are coded as 1 if they are separated and 0 otherwise (Iyengar et al ., ; Lau et al ., ; Kent et al ., ). The median score for the number of board meetings is 8 with companies above (below) the median coded as 1 (0) (Kent and Stewart, ; Abeysekera, ; Gray and Nowland, ; Kent and Zunker, ).…”

Section: Methodsmentioning

confidence: 97%

The importance of cash flow disclosure and cost of capital

Kent

2018

Accounting & Finance

View full text Add to dashboard Cite

We examine whether the choice of cash flow disclosure under International Accounting Standard 7 has an influence on the cost of capital incurred by Australian listed companies. Results indicate that indirect method companies incur a significantly higher ex-ante cost of equity than direct method companies using a combined equity model approach. We also demonstrate that using an optimal weighted combination of equity models reduces model variance and bias compared to using a single equity model. Our findings support mandating the direct method and have the potential to induce companies to report the direct method to increase company value.

show abstract

Section: Methodsmentioning

confidence: 97%

The importance of cash flow disclosure and cost of capital

Kent

2018

Accounting & Finance

View full text Add to dashboard Cite

show abstract

“…However, the recent study by Kent et al (2016) provides some impetus for further scrutiny. The authors conclude that a minimum committee size seems necessary in order to engage in effective negotiations on executive pay.…”

Section: H1 Where V-c's Are Members Of Remuneration Committees Therementioning

confidence: 99%

Because you're worth it? Determinants of Vice Chancellor pay in the UK

Walker

Greve

Wood

et al. 2019

Industrial Relations Journal

View full text Add to dashboard Cite

Wage inequality has increased across most developed nations; this has been manifested in a wide range of organisations and sectors, with implications for well‐being and sustainability; within UK universities, this has become increasingly visible. There is increasing pressure on universities to deliver social and economic impact in an increasingly market‐driven and metric‐driven environment. In the UK context, increasing financial pressure has led to both an escalation of student fees and constrained wage growth for faculty. In contrast, most Vice Chancellors have secured substantive pay packages raising concerns that regulatory failures may be contributing to the rise. We show that Vice Chancellors use their internal power within organisations to extract a disproportionate amount of the value created by the institution. However, we encountered much diversity according to the quality of governance, highlighting the extent to which not only contextual but also internal dynamics drive wage inequality.

show abstract

“…First, the main contribution of the study is that, we provide robust empirical evidence in support of the managerial power axiom (Bebchuk et al 2002;Bebchuk & Fried 2003, 2004, 2006. We reconcile inconclusive results on whether an independent compensation committee strengthens the relationship between top managers' pay and firm performance link (e.g., Newman & Mozes 1999;Capezio et al 2011;Kent et al 2016) by first time considering the conditions under which independent compensation committee is effective in reinforcing this link. Thus, we contribute to the literature by considering and providing first evidence that an independent compensation committee is efficient in setting executives' pay when it is gender-diverse than when it is not.…”

Section: Introductionmentioning

confidence: 59%

Executives' pay–performance link in China: evidence from independent and gender-diverse compensation committees

Usman

Siddique

Makki

et al. 2020

IJOEM

View full text Add to dashboard Cite

PurposeIn this paper, the authors investigate whether an independent and gender-diverse compensation committee strengthens the relationship between top managers' pay and firm performance in Chinese companies. The authors also investigate whether the independent compensation committee composed of all male directors is effective in designing the optimal contract for executives.Design/methodology/approachThe authors use data from A-share listed companies on the Shenzhen and Shanghai stock exchanges from 2005 to 2015. As a baseline methodology, the authors use pooled ordinary least square (OLS) regression to draw inferences. In addition, cluster OLS regression, two-stage least square regression, the two-stage Heckman test and the propensity score matching method are also used to control for endogeneity issues.FindingsThe authors find evidence that an independent or gender-diverse compensation committee strengthens the link between top managers' pay and firm performance; that the presence of a woman on the compensation committee enhances the positive influence of committee independence on this relationship; that a compensation committee's independence or gender diversity is more effective in designing top managers' compensation in legal-person-controlled firms than they are in state-controlled firms; that gender diversity on the compensation committee is negatively associated with top managers' total pay; and that an independent compensation committee pays top managers more.Practical implicationsThe study results highlight the role of an independent compensation committee in designing optimal contracts for top managers. The authors provide empirical evidence that a woman on the compensation committee strengthens its objectivity in determining top managers' compensation. The study finding supports regulatory bodies' recommendations regarding independent and women directors.Social implicationsThe study findings contribute to the recent debate about gender equality around the globe. Given the discrimination against women, many regulatory bodies mandate a quota for women on corporate boards. The study findings support the regulatory bodies' recommendations by highlighting the economic benefit of having women in top management positions.Originality/valueThis study contributes to literature by investigating the largely overlooked questions of whether having a gender-diverse or independent compensation committee strengthens the relationship between top managers' pay and firm performance; whether an independent compensation committee is more efficient in setting executives' pay when it is gender-diverse; and whether the effect of independent directors and female directors on top managers' compensation varies based on the firm's ownership structure. Overall, the main contribution of the study is that the authors provide robust empirical evidence in support of the managerial power axiom.

show abstract

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

Cited by 25 publications

References 97 publications

The importance of cash flow disclosure and cost of capital

The importance of cash flow disclosure and cost of capital

Because you're worth it? Determinants of Vice Chancellor pay in the UK

Executives' pay–performance link in China: evidence from independent and gender-diverse compensation committees

Contact Info

Product

Resources

About