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The purpose of this viewpoint is to comment on the implications of the Financial Reporting Council’s (FRC) Review and Consultation Documents expected to update regulation governing the determination/reporting of executive remuneration in UK stock market listed companies. Practical points from actors involved in executive remuneration decision-making/reporting are presented, set within the context of neo-institutional theory.

This qualitative research systematically analyses UK Corporate Governance Codes, the FRC’s recent Review/Consultation and peer-reviewed published studies of executive pay determination based on in-depth interviews with non-executive directors, institutional investors, executive pay advisers and human resources (HR) professionals.

Further regulation, while providing coercive influence over executive remuneration decision-making, is likely to lead to only limited change in processes and reporting due to benchmarking, the make-up of Remco membership and shareholders' preferences. Mimetic and normative isomorphic forces work against coercive isomorphism leading to resistance to change as decision-makers strive to safeguard their social status/reputations.

Reviewing executive remuneration package components and paying attention to company strategy, sustainability and values in pay determination are welcomed but recognised as difficult to achieve. Drawing upon a wider range of information sources/voices can assist in broadening the discussion. HR professionals can help widen stakeholder input to executive remuneration decision-making.

The authors’ viewpoint is grounded in peer-reviewed empirical data that draws directly upon the views/experiences of executive remuneration decision-makers to identify problems in adhering to FRC recommendations for change. The authors extend the meta-theoretical perspective of neo-institutional theory – specifically institutional isomorphism – as providing explanatory and predictive power to understand executive pay decision-making.

Agency theory motivated this study, posing that leverage mitigates the agency problem. The aim was to examine whether leverage influences the relationship between executive-employee pay gaps (EEPGs) and firm performance. The study was conducted in the mining and retail sectors between 2012 and 2021.

Two EEPGs were featured based on their executive fixed pay and variable incentives accumulation. Proxies of firm performance were headline earnings per share; return on assets; earnings before interest, tax, depreciation and amortisation; and return on stock price. Data were collected from 76 JSE-listed firms in the retail and mining sectors and analysed using the two-step generalised method of moments.

The results revealed the hybrid implication of the pay gap for firm performance in the retail and mining sectors of South Africa, depending on the performance measures emphasised. More importantly, the study shows that with the moderating effects of leverage, firms can improve their performance while shrinking the pay gap.

The results have implications for policy addressing income inequality, debt management, executive compensation and regulatory reforms in South Africa concerning productivity and remuneration decisions.

The article provides specific literature for retail and mining industries on pay gaps, shows that it is possible to reduce the pay gap without compromising performance and suggests a new measure of performance that is more attuned to pay gap effect measurement.

This study aims to examine the effect of CEO compensation risk, as measured by the proportion of equity-based pay (option and stock awards) relative to total compensation and pay sensitivity to stock volatility, on CEO pay for luck asymmetry. This paper also empirically examines CEO compensation risk as a mediating variable between the regulatory changes and CEO pay for luck asymmetry.

This paper test the proposed two hypothesis that CEO compensation risk is positively associated with the degree of CEO pay for luck asymmetry; and the pay related regulations implemented around 2006 could mitigate the degree of CEO pay for luck asymmetry using the fixed-effects regression models.

Consistent with the managerial talent retention hypothesis, this paper finds that CEO compensation risk, as measured by the equity-based pay as a proportion of CEO total compensation and CEO pay sensitivity to stock volatility, is positively associated with the degree of CEO pay for luck asymmetry. In addition, this paper find that CEO pay for luck asymmetry is significantly reduced by the major regulatory changes on executive compensation implemented around 2006.

This study is among the very few studies exploring the impact of CEO compensation risk on pay for luck asymmetry in the literature. While the major purpose of the widely used stock options is to align executive interests and shareholder values, it also tends to increase the risk level of CEO compensation. So, a well-designed CEO pay package should protect risk-averse CEOs from bad luck for the retention purpose, which is also beneficial to shareholder wealth maximization. Therefore, future research on executive compensation needs to examine the issue from various perspectives.

For board of directors who is responsible for the compensation of CEOs, it is necessary to consider a broad range of factors when designing an optimal CEO pay package.

The findings on the impact of regulations on CEO pay for luck asymmetry suggest that the executive-pay-related regulations around 2006 have indeed achieved some of their intended goals to significantly lower pay for nonperformance asymmetry, whereby CEO pay sensitivity to stock volatility has been identified as a major mediating variable.

This study contributes to the literature on executive pay for luck asymmetry in several perspectives. First, this paper finds that CEO compensation risk has a positive impact on the degree of CEO pay for luck asymmetry. Second, this paper finds that the CEO pay for luck asymmetry has been mitigated after 2006 when various regulatory changes on executive compensation began to be implemented in the USA. To the best of the authors’ knowledge, this study is among the very few studies investigating these issues in the literature.

This paper studies the relationship between CEO pay-performance sensitivity and CEO pay for luck as well as the asymmetric benchmarking of CEO pay in which good luck is rewarded but bad luck is not penalized symmetrically. We further explore the impact of the regulatory changes on executive compensation taking effect in the 2000s on CEO pay for luck and asymmetry.

In this study, we examine the relationship between CEO pay-performance sensitivity and CEO pay for luck and the asymmetric benchmarking of CEO compensation. The sample consists of DJIA component companies over a 71-year period from 1950 to 2020. CEO pay-performance sensitivity is measured by both delta and Jensen-Murphy pay-performance sensitivity.

We find that an increase in CEO pay-performance sensitivity as measured by both delta and Jensen-Murphy pay-performance sensitivity leads to an increase in the degree of CEO pay for luck but tends to reduce the level of CEO pay for luck asymmetry. In addition, we find that the major pay-related regulatory changes in recent years have mitigated the degree of CEO pay for luck and pay asymmetry, in which CEO pay structure and the associated CEO pay-performance sensitivity are major mechanisms through which the regulatory changes take effect.

Our findings provide empirical evidence supporting the argument that both optimal contracting and rent extraction should be considered as important determinants of CEO compensation.

When a firm designs the pay packages for its CEO to align CEO wealth to firm performance, CEO pay-performance sensitivity is expected to improve. However, the improved CEO PPS can also lead to an increased CEO pay for non-performance (Luck), which is an undesired outcome from the shareholder view. Therefore, a firm should thoroughly consider various advantages and disadvantages when compensating its top executives. Third, pay-related regulations have indeed achieved some intended outcomes such as the diminished pay for luck and asymmetry, but they also exacerbated the positive relationship between CEO pay-performance sensitivity and the asymmetric benchmarking of CEO pay. It seems that executive pay-related regulations cannot achieve perfect outcomes without side effects. Continuous reforms and regulations on corporate governance should be a dynamic process under various changing situations.

This study contributes to the literature on executive pay for luck and asymmetry in several ways. First, our study is among the few studies empirically testing the relationship between CEO pay-performance sensitivity and pay for luck and asymmetry. We find that CEO pay-performance sensitivity tends to increase the degree of CEO pay for luck but reduce the level of asymmetric benchmarking of CEO pay. These findings partly support the rent extraction theory grounded on the managerial power hypothesis and partly support the optimal contracting theory. Our findings confirm that the optimal contracting theory and the rent extraction theory are both important for explaining the practices and historical trends of CEO compensation.

This study aims to explore the relationship between foreignness and CEO pay.

This study combines cross-sectional and time series observations analyzed with panel data methodology in a sample of 59 firms listed in the Spanish IBEX-35 index between 2006 and 2020.

International ownership influences CEO underpayment and foreign sales influence CEO overpayment.

CEO pay is susceptible to being influenced by foreign non-American variables. An appropriate understanding of these factors can contribute to discussing policies that balance the level of CEO payment in large public firms.

Research on internationalization and CEO pay is scarce. A handful of studies confirm the link between Americanization and executive compensation in Europe. However, the authors still do not know if the level of CEO pay is influenced by non-American exposure. To do this, the authors test the effect of firm – ownership, sales, board – and individual – CEO – exposure to international, non-US environments on the level of over/underpayment of CEOs in a sample of Spanish firms.

Explorar la relación entre la extranjería y la remuneración de los CEO.

Combinamos observaciones transversales y de series temporales analizadas con metodología de datos de panel en una muestra de 59 empresas del índice IBEX-35 español entre 2006 y 2020.

La propiedad internacional influye en la remuneración insuficiente de los CEO y las ventas en el extranjero influyen en la remuneración excesiva de los CEO.

La investigación sobre la internacionalización y la remuneración de los CEO es escasa. Un puñado de estudios confirman el vínculo entre la americanización y la remuneración de los ejecutivos en Europa. Sin embargo, todavía no sabemos si el nivel de remuneración de los CEO está influenciado por la exposición no estadounidense. Para ello, probamos el efecto de la exposición de la empresa (propiedad, ventas, consejo) y del individuo (CEO) a entornos internacionales, no estadounidenses, sobre el nivel de sobre/insuficiente remuneración de los CEO en una muestra de empresas españolas.

La remuneración de los CEO es susceptible de verse influenciada por variables extranjeras no estadounidenses. Una comprensión adecuada de estos factores puede contribuir a discutir políticas que equilibren el nivel de remuneración de los CEO en las grandes empresas públicas.

Explorar a relação entre estrangeirismo e remuneração de CEO.

Combinamos observações transversais e de séries temporais analisadas com metodologia de dados em painel em uma amostra de 59 empresas listadas no índice espanhol IBEX-35 entre 2006 e 2020.

A propriedade internacional influencia o sub pagamento de CEO e as vendas no exterior influenciam o super pagamento de CEO.

Pesquisas sobre internacionalização e remuneração de CEO são escassas. Alguns estudos confirmam a ligação entre americanização e remuneração de executivos na Europa. No entanto, ainda não sabemos se o nível de remuneração de CEO é influenciado pela exposição não americana. Para fazer isso, testamos o efeito da exposição da empresa - propriedade, vendas, conselho - e individual - CEO - a ambientes internacionais, não americanos, no nível de super/sub pagamento de CEOs em uma amostra de empresas espanholas.

A remuneração de CEO é suscetível a ser influenciada por variáveis estrangeiras não americanas. Uma compreensão adequada desses fatores pode contribuir para discutir políticas que equilibram o nível de remuneração de CEO em grandes empresas públicas.

This study aims to analyse the motivations and underlying assumptions of decision makers driving the adoption of sustainability-oriented targets in executive compensation (SCTs) to better understand SCTs’ impact on sustainability performance.

Through a qualitative approach, 15 in-depth interviews are conducted in a two-tier governance setting. Participants include management and supervisory board members, compensation consultants and other stakeholders involved in proxy voting.

SCT implementation is primarily determined by meeting shareholders’ expectations rather than those of other stakeholders. Decision makers react in a differentiated way to increased expectations by implementing either primarily symbolic or substantive measures and encounter different implementation challenges like insufficient data quality and a lack of experience within supervisory boards, both of which potentially contribute to decoupling.

The study offers valuable insights for companies in designing SCTs and emphasises the significance of addressing decoupling to effectively enhance sustainability performance through SCTs and provides a foundation for future studies aimed at analysing this phenomenon.

Using a neo-institutional theory lens, this study marks one of the first interview-based investigations to distinguish between symbolic and substantial SCTs. It delves deeply into the role of decoupling and the associated challenges, offering fresh perspectives within the under-researched framework of a two-tier corporate governance structure. Moreover, this study aims to meticulously capture the real-world design practices and implementation processes of SCTs through experts, an aspect that was emphasised as a limitation in previous studies.

This study aims to determine experimentally factors affecting the satisfaction of retail stock investors with various investor protection regulatory measures implemented by the Government of India and Securities and Exchange Board of India (SEBI). Also, an effort has been made to gauge the level of satisfaction of retail equities investors with the laws and guidelines developed by the Indian Government and SEBI for their invested funds.

To accomplish the study’s goals, a well-structured questionnaire was created with the help of a literature review, and copies of it were filled by Punjabi retail equities investors with the aid of stockbrokers, i.e. intermediaries. Amritsar, Jalandhar, Ludhiana and Mohali-area intermediaries were chosen using a random selection procedure. Xerox copies of the questionnaire were given to the intermediaries, who were then asked to collect responses from their clients. Some intermediaries requested the researcher to sit in their offices to collect responses from their clients. Only 373 questionnaires out of 1,000 questionnaires that were provided had been received back. Only 328 copies were correctly filled by the equity investors. To conduct the analysis, 328 copies, which were fully completed, were used as data. The appropriate approaches, such as descriptives, factor analysis and ordinal regression analysis, were used to study the data.

With the aid of factor analysis, four factors have been identified that influence investors’ satisfaction with various investor protection regulatory measures implemented by government and SEBI regulations, including regulations addressing primary and secondary market dealings, rules for investor awareness and protection, rules to prevent company malpractices and laws for corporate governance and investor protection. The impact of these four components on investor satisfaction has been investigated using ordinal regression analysis. The pseudo-R-square statistics for the ordinal regression model demonstrated the model’s capacity for the explanation. The findings suggested that a significant amount of the overall satisfaction score about the various investor protection measures implemented by the government/SEBI has been explained by the regression model.

A study could be conducted to analyse the perspective of various stakeholders towards the disclosures made and norms followed by corporate houses. The current study may be expanded to cover the entire nation because it is only at the state level currently. It might be conceivable to examine how investments made in the retail capital market affect investors in rural areas. The influence of reforms on the functioning of stock markets could potentially be examined through another study. It could be possible to undertake a study on female investors’ knowledge about retail investment trends. The effect of digital stock trading could be examined in India. The effect of technological innovations on capital markets can be studied.

This research would be extremely useful to regulators in developing policies to protect retail equities investors. Investors are required to be safeguarded and protected to deal freely in the securities market, so they should be given more freedom in terms of investor protection measures. Stock exchanges should have the potential to bring about technological advancements in trading to protect investors from any kind of financial loss. Since the government has the power to create rules and regulations to strengthen investor protection. So, this research will be extremely useful to the government.

This work has societal ramifications. Because when adequate rules and regulations are in place to safeguard investors, they will be able to invest freely. Companies will use capital wisely and profitably. Companies should undertake tasks towards corporate social responsibility out of profits because corporate houses are part and parcel of society only.

Many investors may lack the necessary expertise to make sound financial judgments. They might not be aware of the entire risk-reward profile of various investment options. However, they must know various investor protection measures taken by the Government of India & Securities and Exchange Board of India (SEBI) to safeguard their interests. Investors must be well-informed on the precautions to take while dealing with market intermediaries, as well as in the stock market.

This study aims to contribute to the ongoing assessment of executive compensation by investigating the nexus between managerial entrenchment factors, adopting a multifaceted perspective encompassing both economic and non-economic dimensions.

This research employs pooled cross-sectional Ordinary Least Squares (OLS) regression and Least Squares with Dummy Variables (LSDV) models with fixed effects to examine the determinants of Chief Executive Officer (CEO) compensation.

This research identifies firm size, performance (via ROA and Tobin’s Q), and CEO characteristics (age, tenure, stock ownership, MBA degree) as significant determinants of executive compensation at the 0.05 level. In contrast, the prestige of educational institutions, doctoral degrees, and the MBA’s relevance to short-term performance, along with CEO tenure, do not significantly affect pay. Additionally, the study highlights the significance of industry type (manufacturing vs technology) in shaping compensation, emphasizing the role of firm metrics and CEO credentials in designing executive pay packages.

This research introduces an innovative approach to controlling unobserved heterogeneity and adjusting for the dynamic nature of CEO compensation attributes across diverse CEO characteristics. By integrating both pooled Ordinary Least Squares (OLS) and Least Squares Dummy Variable (LSDV) models, the study addresses the challenges posed by time-invariant variables and unobservable heterogeneity. Such issues have historically skewed the accuracy of traditional OLS models in identifying the comprehensive array of factors—both economic and non-economic—that influence CEO compensation. This novel methodological framework significantly advances the examination of unobservable variables that may vary not only across the firms selected for analysis but also over time periods, thereby offering a more detailed understanding of the determinants of CEO pay.

This study investigates the current trends in CEO compensation by applying a bibliometric technique from the Scopus database.

The bibliometric analysis examines CEO compensation trends through the Scopus database. Frequency analysis is conducted using Microsoft Excel, while data visualisation is performed using VOSviewer. Finally, citation metrics are carried out using Harzing's Publish or Perish.

The results reveal that research into CEO compensation has been consistently increasing since 1976. This study identifies the most popular publication trends, the most active institutions, the top funding institutions, annual publication growth, document and source type, publishers, subject area, author co-citations, highly cited articles, top publishing countries, and keyword co-occurrences. Notably, Arizona State University in the United States (US) is the leading institution with the most prominent publications on CEO compensation. The US is the most active country involved in CEO compensation research.

The current research only derived articles from the Scopus database. Nonetheless, the findings provide an in-depth comprehension of the meaning of “CEO compensation” and present the outline of the research trends on the concept, thus significantly facilitating further studies.

The findings can assist researchers in comprehending and classifying the drivers of CEO compensation previously identified and proven in past studies. Additionally, the findings also create opportunities for new researchers to study CEO compensation.

This study is among the pioneering research investigating CEO compensation-related publications and utilising the Scopus database from an international perspective. This study also offers a historical view of CEO remuneration, a summary of the most significant nations, journals, and writers on the topic, and an outline of how CEO remuneration studies have changed over time. These contributions will enable other researchers to focus on this subject.

This study aims to investigate the use of voluntary disclosure on mainstream social media platforms to examine strategic responses to the COVID-19 pandemic. It examines the influential factors and institutional pressures organisations faced when making disclosures on social media during the pandemic.

A two-stage qualitative approach was adopted. Stage one used content analysis to examine voluntary disclosures made by international organisations on social media during the emergence of the COVID-19 pandemic. Stage two comprised semi-structured interviews with individuals who were involved in the decision-making process around the social media disclosures.

This study’s findings reveal significant changes in disclosure practices due to COVID-19-related pressures. In addition to the utilisation of social media for signalling conformance with new pandemic-related norms and connecting with stakeholders, the evidence also reveals how organisations made use of strategic responses to COVID-19-related institutional pressures.

The findings reveal how social media was used as a means of timely voluntary disclosure during the examined crisis. The findings can inform the development of organisational guidelines and policies for the use of social media as a disclosure medium.

This study reveals how organisations used voluntary disclosure on social media as a strategic response to institutional pressures and the COVID-19 pandemic; this context is under-researched. The study also extends the application of the strategic response framework regarding voluntary disclosure via social media.