Top executive compensation: Equity or excess? Implications for regaining American competitiveness

CEO compensation in Australia: Is there a relationship between principles, policies and practices?

“…It could also be suggested that the gradual decline in this relationship over the period studied (1988: r = 0.66 and r2 = 0.44; 2000: r = 0.58 and r' = 0.3309) is related to a change in the design and structure of CEO pay with an increased use of STIs and LTIs. Recent research in Australia (O'Neill and Iob 1999) and the US (Walters, Hardin and Schick 1995) identifies an inverse relationship between organisational performance and CEO compensation. While Table 3 Simple linear regression results of CEO base pay and organisational size Note: all figures significant p < 0.05. over the initial period , the correlation between stock market indicators and compensation was weak but positive, in the second period , there was no significant statistical relationship.…”

“…As Williamson (1985) comments, the use of the committee avoids the problem of senior executives appearing to write their own contract with one hand and sign it with the other. In spite of this, as Main and Johnston (1992) and Walters, Hardin and Schick (1995) identify, the non-executives on the compensation committees are often senior executives of other companies and therefore have a vested interest in the process and outcomes. These recommendations strongly influenced the Bosch Committee in their Corporate practices and conduct (1995) report in Australia.…”

“…The significant part that teamwork plays in achieving organisational success has directed attention to how employee reward systems can contribute to team effectiveness'. In the context of joint effort and teamwork, both moral and ethical considerations regarding the levels of CEO compensation need to be considered (Walters, Hardin and Schick 1995;Pratt 1996). Despite these arguments, the primary motive for the growth in CEO compensation is to reward improved organisational performance, and to that end, organisations have been restructuring CEO pay to link it more closely to the business objectives (O'Neill 1999a). In the context of joint effort and teamwork, both moral and ethical considerations regarding the levels of CEO compensation need to be considered (Walters, Hardin and Schick 1995;Pratt 1996). Despite these arguments, the primary motive for the growth in CEO compensation is to reward improved organisational performance, and to that end, organisations have been restructuring CEO pay to link it more closely to the business objectives (O'Neill 1999a).…”

“…As Brickford and Sorkin (1990) have noted, the impact of chief executive compensation on the organisation must be well thoughtout. In the context of joint effort and teamwork, both moral and ethical considerations regarding the levels of CEO compensation need to be considered (Walters, Hardin and Schick 1995;Pratt 1996). Despite these arguments, the primary motive for the growth in CEO compensation is to reward improved organisational performance, and to that end, organisations have been restructuring CEO pay to link it more closely to the business objectives (O'Neill 1999a). The proportion of the total annual reward that is granted as a variable component has been increasing.…”

Pay, Compensation, and Performance, Psychology of

“…They tend to act upon the compensation consultant's recommendation (Walters et al, 1995). Under classic economic theory, a reasonable price is obtained through negotiations that are at arm's length between an informed seller and an informed buyer.…”