Search results

1 – 10 of over 98000
Article
Publication date: 13 February 2017

Brandy Hadley

The purpose of this paper is to examine the determinants of the increase in firms’ reporting of alternative pay measures in Pay for Performance disclosures and their role…

Abstract

Purpose

The purpose of this paper is to examine the determinants of the increase in firms’ reporting of alternative pay measures in Pay for Performance disclosures and their role in subsequent Say on Pay approval.

Design/methodology/approach

This study explores the most common types of supplemental compensation disclosures used in Pay for Performance discussions using a hand-collected sample of S&P 500 proxy statements from 2012-2014. The sample compares key characteristics of firms reporting “pocketed” pay, “market-value” pay, and “peer comparison” percentile ranking pay compared to firms that do not use these alternatives.

Findings

Results suggest that firms use alternative pay measures in their Pay for Performance disclosures for different reasons. While “pocketed” pay reporters show characteristics of opportunistic disclosures and “peer comparison” reporters tend toward informative disclosure, there is often a significant positive impact of disclosing additional compensation information on Say on Pay approval when combating prior poor Say on Pay support. However, the effect seems most significant for peer comparisons, indicating the value of reporting comparative pay.

Originality/value

This study provides insights into the increasing use of alternative pay measures, and through these measures, identifies an additional mechanism of firms’ responses to Say on Pay votes. In addition, this study highlights the importance of standardized Pay for Performance disclosures to improve informativeness and comparability in financial reporting across firms. Finally, the study provides additional evidence of opportunistic disclosure by firms in order to preserve executive pay.

Details

Managerial Finance, vol. 43 no. 2
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 January 1975

Knight's Industrial Law Reports goes into a new style and format as Managerial Law This issue of KILR is restyled Managerial Law and it now appears on a continuous…

Abstract

Knight's Industrial Law Reports goes into a new style and format as Managerial Law This issue of KILR is restyled Managerial Law and it now appears on a continuous updating basis rather than as a monthly routine affair.

Details

Managerial Law, vol. 18 no. 1
Type: Research Article
ISSN: 0309-0558

Article
Publication date: 20 March 2009

Thomas A. Hemphill and Waheeda Lillevik

The purpose of this paper is to discuss the issues surrounding “sayonpay” legislation in the USA; evaluate the corporate governance alternatives to “sayonpay”…

1572

Abstract

Purpose

The purpose of this paper is to discuss the issues surrounding “sayonpay” legislation in the USA; evaluate the corporate governance alternatives to “sayonpay” legislation; recommend a policy encouraging enhanced executive accountability; and suggest research questions pertaining to “sayonpay” proposals and executive compensation for scholars to pursue.

Design/methodology/approach

The paper takes an exploratory approach to discussing and analyzing the issues surrounding “sayonpay” legislation in the USA and offering an alternative corporate governance approach to enhancing executive performance.

Findings

The paper finds that whether an annual non‐binding “sayonpay” policy is instituted or not within a company is not the crux of the executive compensation issue. What is important is whether concerned shareholders have the ability to have proxy access and successfully pass such a resolution, thereby exercising shareholder pressure on the board of directors to implement a corporate policy of equating appropriate executive compensation with managerial performance. Moreover, this improvement in board‐shareowner engagement, along with expanded disclosure of executive compensation packages, will assist in obviating the need for the exercise of a draconian shareholder resolution to remove directors.

Originality/value

This paper offers an in‐depth review of the “sayonpay” legislative and corporate governance controversy; places the issue in the context of effective corporate governance; recommends a reasoned approach to executive compensation accountability; and offers a list of research questions for corporate governance and human resource management scholars to pursue.

Details

International Journal of Law and Management, vol. 51 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

Book part
Publication date: 13 October 2017

Anne Lafarre

In this chapter, we explore the legal framework of AGMs in seven Member States (Austria, Belgium, Germany, France, Ireland, the Netherlands, and the United Kingdom) of…

Abstract

In this chapter, we explore the legal framework of AGMs in seven Member States (Austria, Belgium, Germany, France, Ireland, the Netherlands, and the United Kingdom) of shareholder decision-making rights. We find that, since only a small part of the decision-making rights is harmonized at the European level, there are numerous differences in shareholder rights among national laws. These decision-making rights are usually about the topics director (re-)elections, pay matters, share capital, amendments to articles of association, annual accounts, etc. To be able to conduct empirical research in the remaining chapters, we develop a categorization framework of 15 voting items.

Article
Publication date: 10 February 2018

Jörn Obermann and Patrick Velte

This systematic literature review analyses the determinants and consequences of executive compensation-related shareholder activism and say-on-pay (SOP) votes. The review…

Abstract

This systematic literature review analyses the determinants and consequences of executive compensation-related shareholder activism and say-on-pay (SOP) votes. The review covers 71 empirical articles published between January 1995 and September 2017. The studies are reviewed within an empirical research framework that separates the reasons for shareholder activism and SOP voting dissent as input factor on the one hand and the consequences of shareholder pressure as output factor on the other. This procedure identifies the five most important groups of factors in the literature: the level and structure of executive compensation, firm characteristics, corporate governance mechanisms, shareholder structure and stakeholders. Of these, executive compensation and firm characteristics are the most frequently examined. Further examination reveals that the key assumptions of neoclassical principal agent theory for both managers and shareholders are not always consistent with recent empirical evidence. First, behavioral aspects (such as the perception of fairness) influence compensation activism and SOP votes. Second, non-financial interests significantly moderate shareholder activism. Insofar, we recommend integrating behavioral and non-financial aspects into the existing research. The implications are analyzed, and new directions for further research are discussed by proposing 19 different research questions.

Details

Journal of Accounting Literature, vol. 40 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 17 March 2022

Marilee Van Zyl and Nadia Mans-Kemp

Companies around the globe increasingly receive immense shareholder scrutiny due to perceivably excessive executive director remuneration. The debate in South Africa…

Abstract

Purpose

Companies around the globe increasingly receive immense shareholder scrutiny due to perceivably excessive executive director remuneration. The debate in South Africa intensifies due to severe pay inequality. The authors thus accounted for the perspectives of asset managers and listed financial services companies in South Africa pertaining to the impact of voting and engagement on director pay policies and practices.

Design/methodology/approach

Semi-structured interviews were conducted with selected asset managers, chief executive officers, chief financial officers and remuneration committee members of listed financial services companies to gauge their views on the impact of shareholder activism endeavours on remuneration governance. The qualitative data was analysed by conducting thematic analysis.

Findings

Most of the asset managers and financial services representatives preferred proactive, private engagement on pay concerns, given the impact thereof on voting outcomes, and ultimately director remuneration practices and policies. Independent remuneration committees have a prominent role in facilitating engagements with investors to ensure fair remuneration.

Research limitations/implications

The consequences should be clearer if organisations receive substantial votes against their pay policies and implementation reports. South African regulators can consider the “two-strikes” rule to ensure that action is taken in response to shareholder voting on director remuneration matters.

Originality/value

Representatives of asset managers and listed financial services investee companies offered valuable insights on remuneration governance deliberations in an emerging market. This in-depth analysis highlights the importance of proactive engagement to ensure that corporate leaders are paid fairly.

Details

Personnel Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0048-3486

Keywords

Article
Publication date: 8 July 2022

Stephen J. Perkins and Susan Shortland

The purpose of this paper is to explore the social construction of executive pay in the UK via an examination of narratives drawn from the social actors on the front-line…

Abstract

Purpose

The purpose of this paper is to explore the social construction of executive pay in the UK via an examination of narratives drawn from the social actors on the front-line of Key Management Personnel (KMP) pay determination.

Design/methodology/approach

The authors' qualitative research draws upon in-depth interviews with non-executive directors (NEDs) serving on remuneration committees, institutional investors, and independent pay consultants.

Findings

Regulation, market pricing and risk mitigation together with the social processes inherent within discharging corporate governance responsibilities create a status-quo-preserving isomorphic effect, restricting context-sensitive approaches to KMP pay determination.

Practical implications

The paper informs action by company directors, investors and policy makers to address KMP pay controversies, building shared accountability amongst decision-makers focussed on more strategic context-aligned processes and outcomes.

Originality/value

The authors' analysis illustrates how institutional isomorphism can be applied to analyse social actors' interpretations within KMP pay decision-making. The authors show that normative, coercive and mimetic isomorphic forces must be applied in dynamic interaction to extend the explanatory power of institutional isomorphism through the creation of a “No-Come-In” effect in respect of contemporary KMP pay determination settings.

Details

Journal of Organizational Effectiveness: People and Performance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2051-6614

Keywords

Article
Publication date: 5 February 2018

Haiyan Jiang and Honghui Zhang

The purpose of this paper is to investigate whether regulatory restriction on executive compensation in Chinese state-owned enterprises is beneficial to firm performance…

1328

Abstract

Purpose

The purpose of this paper is to investigate whether regulatory restriction on executive compensation in Chinese state-owned enterprises is beneficial to firm performance. The authors also examine the role of monitoring mechanisms in offsetting the effect of compensation restriction.

Design/methodology/approach

Multivariate analysis is conducted using archival data from Chinese listed companies over the period of 2007-2014.

Findings

The findings show that the restriction on executive compensation is negatively associated with a firm’s accounting performance, and this negative effect is ameliorated in firms with good internal control and a high level of institutional shareholding. Additional analysis reveals that the negative effect of pay restriction on firm performance is more pronounced in central government-controlled listed SOEs than in those controlled by local government.

Originality/value

This study is the first to investigate a government’s say-on-pay policy. Specifically, the findings pinpoint the inefficacy of regulatory intervention in corporate executive compensation. The findings add to compensation literature using China’s unique institutional setting.

Details

Asian Review of Accounting, vol. 26 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 7 October 2019

Ernestine Gheyoh Ndzi

The paper aims to examine the role of human greed in the determination of executive remuneration in the UK.

Abstract

Purpose

The paper aims to examine the role of human greed in the determination of executive remuneration in the UK.

Design/methodology/approach

The paper reviews the past and existing regulation and corporate governance recommendations on executive remuneration.

Findings

The paper demonstrates that the failure of regulatory mechanisms to curb excessive executive remuneration can be justified on the grounds of human greed. Greed is facilitated by the potential conflict of interest that exists as a result of the executives’ position in the company. The position of the law has given greed the opportunity to manifest, making it quite difficult for executive remuneration to be effectively regulated.

Originality/value

The paper adds to the existing debate on excessive executive remuneration by demonstrating that human greed is the basis of excessive executive remuneration on which limited literature exists.

Details

Journal of Financial Crime, vol. 26 no. 4
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 7 September 2020

J. Samuel Baixauli-Soler, Gabriel Lozano-Reina and Gregorio Sánchez-Marín

The purpose of this paper is to analyze the influence of managerial discretion on the effectiveness of say on pay (SOP) as a governance mechanism. This goal covers an…

Abstract

Purpose

The purpose of this paper is to analyze the influence of managerial discretion on the effectiveness of say on pay (SOP) as a governance mechanism. This goal covers an important gap since the issue of how effective SOP is in promoting more aligned compensation has proved somewhat controversial.

Design/methodology/approach

This empirical research opted for a panel methodology for the period 2003–2017, using a sample of large UK listed-companies (specifically, 3,445 firm-year observations). Data were obtained from several sources (Manifest Ltd, BoardEx, Worldscope, Factset Ownership and DataStream).

Findings

Results show that managerial discretion plays an important role in the effectiveness of SOP as a mechanism for increasing aligned CEO compensation. While individual discretion (latitude of objectives) exerts a negative effect, contextual discretion (latitude of action) increases SOP effectiveness. The global effect of managerial discretion is positive when there is high level of both individual and contextual discretion.

Originality/value

This empirical study provides evidence concerning an emerging topic in the literature regarding the impact of SOP as a shareholder activism mechanism of corporate governance on executive compensation. By taking managerial discretion into consideration as a relevant moderating factor, it also offers a better explanation of SOP effectiveness as a governance mechanism.

Details

Management Decision, vol. 59 no. 6
Type: Research Article
ISSN: 0025-1747

Keywords

1 – 10 of over 98000