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Remuneration policies may differ from country to country, and their effect on bank stability could be due to the legal framework. Therefore, this study aims to investigate how the legal system impacts the relationship between CEO compensation and bank stability across countries.

To test the study hypotheses, the authors use panel data of 74 banks operating in ten OECD countries during the period 2009–2016 and apply the generalized moments method regression model to better remediate the endogeneity problem.

The findings confirm that a country’s banking regulations significantly affect its bank stability. Common law countries have less bank stability than civil law countries. This result can be interpreted by the fact that, in common-law countries, banks’ CEO are strongly protected by the law, so they allocate a large part of bank assets to risky loans to improve their variable remuneration.

The research can help policymakers understand bank stability in one country. Any legal reform would require prior knowledge of how risk-taking may arise in executive compensation.

The contribution is to explain the controversial effect of executive compensation on bank stability in the framework of legal theory. The authors argue that regulators should monitor compensation structures and that the country’s legal origin of law shapes the CEO compensation structure and is a determinant of bank stability. To the best of the authors’ knowledge, there are no studies exploring this field. So, this study tries to shed more light on the dark side of CEOs’ behavior when undertaking risky projects to maximize their remuneration.

This paper aims to review empirical research on the relationship between institutional ownership (IO) and board governance (85 studies).

Based on agency and upper echelons theory, the heterogeneous monitoring function of specific types and the nature of institutional investors on board composition, compensation and chief executive officer (CEO) characteristics will be focused.

The author found that most studies have referred to archival studies, analyzed the impact of board governance on IO, focused on CEO characteristics, neglected IO heterogeneity and advanced regression models to address endogeneity concerns. In line with the theoretical framework, the relationship between total IO and board governance is heterogeneous. However, specific types such as foreign, dedicated and pressure-resistant institutions represent active monitoring tools and push for increased board governance.

The author provided useful recommendations for future research from a content and methodological perspective, e.g. the need for analyzing the impact of IO on sustainable board governance and other characteristics of top management team members, e.g. the chief financial officer.

As many regulatory bodies implemented regulations to promote shareholder rights and board governance, this literature review highlights the connections of both corporate governance mechanisms. Managers should conduct a careful and timely investor analysis and change the composition and compensation of the board of directors in line with institutional investors’ preferences.

This analysis makes useful contributions to prior research by focusing on IO and board governance, whereas the author structured the heterogeneous variables and results within the structured literature review. The authors guides researchers, regulatory bodies and business practice in this corporate governance topic.

Frontline workers (FLWs) constitute a critical part of the implementation cadre within public policies, serving a significant role in the last-mile delivery of public goods and services. FLWs under public programs in low and middle-income countries like India are offered different compensation structures that range from full-time salaries, piece rate honorariums, contractual engagements, to no remuneration. Whilst the rationale for offering different compensations vary, are certain structures more successful in encouraging FLWs to perform a prosocial task? Further, can certain structures encourage FLWs to perform beyond the incentivized policy mandate?

Investigating workers' prosocial effort within policy implementation, the authors conducted a randomized lab-in-the-field inquiry with 344 Anganwadi-based workers (workers under the nutrition policy) in western India. These FLWs were engaged to perform a novel real-effort task that was tied to different incentive structures and their performance was adjudged based on measurable quantity, effort and quality parameters.

Results demonstrate that uncompensated workers invest the greatest amount of effort whilst compromising on task quality, and vice-versa for subjects receiving pay-for-performance compensation. Programs must account for policy focus when offering compensations: volunteer engagement may be counterproductive for quality focus and to the adherence to ancillary task mandates like nature/quality of beneficiary interaction. On the other hand, the distribution of products (like health goods) can rely on volunteer effort.

The study brings together various compensation schemes operating at the field level, under one study using an LFE methodology within the context of policy implementation in India.

Based on stakeholder, agency and institutional theory, this study aims to examine the role of institutional ownership in the relationship between environmental, social and governance practices and CEO compensation.

Utilizing a fixed-effect panel regression analysis, this research utilized a panel data approach, analyzing data spanning from 2014 to 2021, focusing on US companies listed on the S&P500 stock market index. The dataset encompassed 219 companies, leading to a total of 1,533 observations.

The analysis identified that environmental scores significantly impact CEO equity-linked compensation, unlike social and governance scores. Additionally, it was found that institutional ownership acts as a moderating factor in the relationship between the environmental score and CEO equity-linked compensation, as well as the association between the social score and CEO equity-linked compensation. Interestingly, the direction of these moderating effects varied between the two relationships, suggesting a nuanced role of institutional ownership.

This research makes a unique contribution to the field of corporate governance by exploring the relatively understudied area of institutional ownership's influence on the ESG practices–CEO compensation nexus.

Taking cues from the fact that there remains a dearth in the establishment of theoretical and empirical relationship between executive compensation and corporate social responsibility (CSR) performance of the firms, this study attempts to explore the non-linear relationship between the said variables.

The study utilizes a strongly balanced panel data set of 179 non-financial National Stock Exchange (NSE) 500 listed firms for the study period of 2015–2020. The study further employs both static as well as Arellano-Bond dynamic panel model under generalized method of moments (GMM) framework to establish the relationship between executive compensation and CSR performance of the sampled firms.

The study acknowledges an inverted U-shaped relationship between executive compensation and environmental, social and governance (ESG) score of the firms. According to the robust estimator, an increase in the level of executive compensation is said to affect CSR performance positively until it surpasses a threshold level of 18.7 percent.

One of the major takeaways that the study provides for the corporate policymakers is that the level of compensation can only motivate the executives to take up socially responsible work up to a certain level surpassing which the executives becomes resistant towards any benefits provided by the CSR performance and get inclined towards economical performances of the firm. At the later stage, the economical expansionary investment benefits overweigh the personal career benefit gained by the executives from the CSR performances of the firm.

The nonlinearity relationship between executive compensation and CSR performance and the threshold level providing the two-fold effect of compensation on the CSR performance of the firms attempted by this study is a rare attempt in an emerging economy like India.

The main goal of this study is to determine the role of employee commitment in the relations between the compensation system and turnover intentions of employees in the Republic of Serbia, as well as to investigate whether there is a mediating effect of employee commitment in this relation.

The primary methodology implemented in the research was data gathering, obtaining theoretical research works on the proposed relations and empirical studies based on the PLS-SEM, analysed by IBM SPSS Statistics and SmartPLS data processing software. The data for the analysis was obtained from a total sample of 764 employees, collected in the Republic of Serbia via an online questionnaire.

The results indicated a positive statistically significant relationship between the formative construct (compensation system) and reflective construct (commitment), as well as a negative statistically significant relationship between the compensation system and reflective construct (turnover intentions). Employee commitment partially mediates the relationship between the compensation system and turnover intentions of employees.

The study was conducted in Serbia and is thus rooted in the specific national context which is characterized by high power distance and high uncertainty avoidance and more collectivistic society with feminine values more expressed. Most of the previous investigations related to the mentioned constructs were performed in companies from more developed countries, including Western Europe and the United States of America, whereas there has been no such research conducted in Serbia to date. The results portrayed a mismatch between the expected relations regarding the attitudes of employees to the rewards and the proposed national context. Modern companies in Serbia need to follow a modern reward mechanism to build stronger commitment and decrease turnover intentions. Moreover, in most earlier research works, compensation was examined in terms of satisfaction with rewards, while this study was based on questions related to perceptions of employees toward HR compensation practices (“The organization offers me”-type questions), not related to their satisfaction. Further, in the majority of previous research works, the compensation system was examined as a variable in combination with other HR processes (staffing, training and development, career development, employee relations, HR planning, communication, etc.), as a HPWP, while in this case the authors used only the practice of compensation (reward elements and employee performance evaluation) to investigate relations with commitment and turnover intentions.

The authors analyze the association between the functional background of the compensation committee chair and CEO compensation. The analysis is motivated by the continuing debate about the reasonableness of executive pay patterns and the growing emphasis on the role of compensation committees.

The authors define three expert categories—accounting, finance, and generalist—and collect data on the compensation committee (CC) chairs of the S&P 500 firms from 2008 to 2018. The authors run an ordinary least square model and regress CEO total and cash compensation on the three expert categories.

The authors find that firms in which the CC chair has expertise in accounting, finance, and general business favor performance measures that are more aligned with accounting, finance, and general business, respectively. There is little evidence that CC chairs who are CEOs of other firms endorse more generous pay for the host CEO; the authors find some evidence that CC chairs tenure relative to the host CEO's is negatively associated with the level of the CEO's pay.

This study suggests that firms and regulators should consider the background of the compensation committee chair to understand the variations in top executive.

Companies desiring to link executive compensation to particular areas of strategy must also consider matching the functional background of the compensation committee chair with the target strategy areas. From regulatory standpoint, requiring compensation committees to operate independent of inside directors can reduce attempts by inside directors to skim the process, but a failure to also consider the impact of compensation committees' discretion over the pay-setting process can distort the executives' pay-performance relation.

This is the first study to examine the effects of the functional background of the compensation committee chair on CEO compensation.

This study investigates the relationship between outside directors, managerial compensation, and firm performance in the Korean insurance industry.

The authors employ a simultaneous equation framework by using three-stage least squares (3SLS) to address the endogeneity problems that could result from the joint determination of outside directors, firm performance, and executive compensation in Korean insurance companies.

The authors find that the ratio of outside directors on the board is negatively associated with insurance firm's value and financial profitability. In addition, this study's evidence shows that greater representation on the board by outside directors leads to a higher level of executive pay. In particular, the authors provide evidence that variable compensation scheme and outside directors who have backgrounds in the legal profession and former high-ranking government officials drive this study's main results.

This study adds to the literature by first demonstrating the interaction effects between outside directors, firm performance, and executive compensation in the Korean insurance industry. Unlike previous studies that typically focus on US companies, the authors study the Korean insurance sector that is an emerging power in the global insurance market, ranking seventh in terms of total premium volume, and show that the Korean insurance firm's outside directors system does not work in the manner that it is intended to function.

Given the serious question raised by the subprime of the 2008 global financial crisis over the rising practices of excessive rewarding of executives in the USA and European firms, the executive pay-performance nexus has emerged as a popular topic of debate in the contemporary corporate finance research. Conducted mostly on the Anglo-Saxon contexts, research outcomes have been inconclusive and dichotomous. Considering this backdrop, this study aims to investigate the endogenous relationship between executive compensation and risk taking in the context of the USA.

Using a large sample of non-financial firms from 2010 to 2020 based on panel data and two-stage least square regression. In this study, the riskier corporate decision is measured as book leverage and ratio of R&D expense to total assets. Chief executive officers’ (CEO) experience and age are used as instrumental variables, and these are expected to influence compensation incentives and, hence, affect firm riskiness indirectly. Firm size, return on assets and CEO turnover are reported to affect compensation and corporate decisions, therefore, included as control variables. Given that higher executive compensation is related to riskier corporate decision in firms, this study incorporates total wealth (i.e. accumulated equity related compensation) as an additional proxy of compensation, and this selection is justifiable by the perfect contracting notion of the agency theory.

The results of this study show a significant positive and increasing nexus among compensation and riskier corporate decisions. Besides, the compensation level proxied through the percentage of each form of compensation in total compensation is very important as greater equity and greater salary diminishes risk taking.

The outcomes of this study have useful implications for firm stakeholders and policymakers.

The level of pay measured by the percentage of each type of compensation in total compensation is of utmost importance as it can increase or decrease risk taking in corporate decisions.

The purpose of this study is to examine the relationship between stock options compensation and firm strategic risk-taking, employing a quantile regression (QR) model. This study aims to analyze whether the impact of stock options on firm strategic risk-taking changes across various quantiles and investigates the moderating role of firm performance.

This study is based on a sample of 90 French firms for the period extending from 2008 to 2019. To deal with the non-uniform association, the authors use a panel quantile method.

The results reveal that the impact of chief executive officer (CEO) stock options on firm strategic risk-taking varies across risk-taking quantiles. More specifically, the study’s results show a positive association at low quantile levels of strategic risk-taking, measured by research and development (R&D) and a negative linkage at high levels. The authors also find that firm performance moderates the impact of CEO stock options on strategic risk-taking.

The non-uniform relationship between CEO stock options and firm strategic risk-taking shows that the weight of CEO stock options in the total compensation can be a major determinant of the firm's strategic risk-taking attitude.

This study extends existing research on executive compensation and strategic risk-taking. Thus, this study has the potential to help stakeholders, board of directors and regulators, who are attempting to understand how the compensation contract – in particular, stock option pay – is related to the risk behavior of the agents and guide them to structure the executive compensation in an optimal way.