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The purpose of this paper is to clarify the influence of chief executive officer (CEO) reputation on top management team (TMT) compensation, proposing corporate governance characteristics as a moderator of the relationships between the power of top managers to extract rents and the importance of external signals. The study aims to expand the domain of executive compensation literature by including the role of CEO reputation in the context of non-Anglo-Saxon corporate governance systems.

The paper opted for a panel methodology for the period 2004-2009, including 534 observations from Spanish listed companies. Data were obtained from several sources. Compensation and governance information was obtained from the Spanish Stock Exchange National Commission; data regarding CEO reputation were obtained from Spanish Corporate Reputation Monitor, and, finally, financial statement was obtained from the OSIRIS database.

The paper provides empirical insights on the CEO reputation diffusion on TMT compensation, showing different scenarios depending on effectiveness of corporate governance. CEO reputation diffusion on TMT pay is strengthened or weakened by the organizational governance effectiveness. General evidence supports the notion that in countries characterized by an incomplete corporate governance system, boards – and also indirectly the structure of ownership – act as a catalyst for external signs of legitimacy, rather than for the organization's and stakeholders’ interests.

Because of the difficulty in pooling information for a long period from three different sources of data, the number of observations is not very large. Therefore, researchers are encouraged to test the proposed propositions further using other context of corporate governance.

The paper includes implications for the development of effective governance mechanisms which promote an adequate link between the CEO reputation and the TMT compensation, avoiding rent extractions.

The paper contributes to new international evidences regarding relations between top managers’ reputations and compensation. Specifically, it allows reinforcement of the importance of institutional arguments in the understanding of the effectiveness of governance mechanisms in large listed companies.

The purpose of this paper is to examine how firm growth, and its decomposition into acquisitive and organic growth, can serve as an antecedent to the disparity in pay between the CEO and other top management team (TMT) members.

Drawing on tournament theory, the authors argue that acquisitive and organic growth strategies have different effects on CEO-TMT pay disparity.

The authors find that acquisitive growth, measured through the number and size of acquisitions, increases CEO-TMT pay disparity while organic growth has no effect on CEO-TMT pay disparity.

The findings, based in the context of the Netherlands, imply that boards in their monitoring activity may need to take into account the potential incentive effects of acquisitive activity as CEOs may have a greater motivation to engage in acquisitions than their fellow TMT members.

This paper contributes to the literature on relative compensation and incentives and the literature on managerial compensation and firm strategy. To investigate the role of firm growth in increasing CEO-TMT pay disparity, the authors adopt a fine-grained approach along two dimensions. First, the authors disaggregate firm growth into organic and acquisition driven firm growth. Second, the authors disaggregate pay disparity in these components.

The purpose of this paper is to examine the effects of the compensation level and the gap between the chief executive officer (CEO) and the top management team (TMT) with respect to the rhythm of firm internationalization.

The approach takes the form of an empirical analysis. The authors use longitudinal data (1997-2006) of a sample of 345 publicly-listed firms in Taiwan.

The results show that higher CEO compensation will lead to regular foreign expansion. The CEO–TMT compensation gap has a curvilinear effect on the rhythm of firm internationalization.

These findings highlight that the compensation structure has a significant influence on a firm ' s internationalization strategy. This research contributes to the literature linking strategic human resource management and corporate strategy in terms of firm internationalization.

When firms consider regular foreign expansion, the compensation committee should design a high total compensation level and appropriate the compensation gap between the CEO and TMT members.

This study sheds light on how the compensation of the upper echelons determines whether the internationalization rhythm is regular or irregular. Moreover, the study examines how internal contingencies, such as performance, moderate the relationship between the upper echelons’ compensation and the internationalization rhythm.

The purpose of this paper is to investigate the relation between countries’ values of individualism/collectivism and organizations’ top management team (TMT) pay structures. Individualistic countries are expected to prefer more hierarchical TMT pay structures and collectivist countries are expected to prefer more egalitarian TMT pay structures. The manuscript also investigates the international implications of the relation between TMT pay structures and organizational performance. Specifically, it is proposed that a country’s level of individualism/collectivism will mediate the relation between TMT pay structure hierarchy and organizational performance.

A pooled sample of data from 56 organizations in 12 countries was used to investigate the research questions. Individualism/collectivism was measured using country specific individualism/collectivism scores and top management pay structures were operationalized using Gini coefficients. Organizational performance was evaluated using return on assets.

Support was found both for a preference for more hierarchical TMT pay structures in individualistic countries, and that a country’s level of individualism/collectivism mediates the relationship between an organization’s top management’s pay structure and company performance.

Findings demonstrate that organizations use pay structures consistent with their environments. Results suggest cultural dimensions can contribute to understanding cross-national TMT pay structures and that national culture plays a significant role in the relationship between TMT pay structure and company performance.

This paper aims to examine how the use of environmental, social and governance (ESG) incentives intersects with top management power and various corporate governance mechanisms to affect excess annual cash bonus compensation.

The authors use a novel artificial intelligence (AI) technique to obtain data about ESG incentives use by firms in the S&P 500. The authors test the hypotheses with an endogenous treatment-regression and a contrast test.

When the top management team has power and uses ESG incentives, there is a 32% reduction in excess annual cash bonuses implying ESG incentives are an effective corporate governance tool. However, nuanced analyses reveal that when powerful management teams with ESG incentives are from environmentally sensitive industries, have a corporate social responsibility (CSR) committee or have long-term view institutional shareholders, they derive excess bonuses.

Stakeholders will better understand management’s motivations for the inclusion of ESG incentives in executive compensation contracts and be able to identify situations which require closer scrutiny.

Given the increased popularity of ESG incentives, society, regulators, boards of directors and management teams will be interested in better understanding when these incentives might be effective and when they might be abused.

To the best of the authors’ knowledge, this study is the first to examine the use of ESG incentives in relation to excess pay. The authors contribute to both the CSR and executive compensation literatures. The work also uses a new methodological technique using AI to gather difficult-to-obtain data, opening new avenues for research.

This study moves beyond existing research on gender diversity to define a new construct – gender power. The study examines gender power within the top management team (TMT) and its relationship to firm performance and firm risk.

The study utilizes a cross-disciplinary combination of upper echelons theory and finance theory as a framework to further examine the impact of gender power within the TMT and its impact on firm risk and firm performance. Employing data collected for 2,570 American publicly traded small-, medium- and large-cap firms over a 20-year period, panel regression analyses were conducted for measures of firm risk and firm performance, beta and return on assets (ROA), respectively.

This study shows that gender diversity and gender power are two distinct constructs with different effects. The findings from this study suggest that gender power may be a stronger predictor of the relationship between firm performance and firm risk than simply gender diversity alone.

This study was conducted based on a sample of publicly traded firms. These relationships may not be generalizable to firms in other contexts. Further, other variables representing firm performance and firm risk may add to this research.

Understanding the differences between gender diversity and gender power may allow firms to make more informed decisions when adding female executives to their TMTs.

This study proposes an objective representational indicator of structural power to measure the relative power of female executives of public companies that allows the expansion of existing research examining the distinction between gender diversity and gender power and their relationship to firm risk and firm performance.

In this study, the authors aim to extend previous research and examine the phenomenon of gender diversity on firm performance in the context that of community-based enterprises (CBEs). The study builds on gender role theory and analyzes three factors that affect the relationship between gender diversity and firm performance: the overall percentage of women in the business, the level of participative decision-making and top management team (TMT) compensation.

Data for this study were obtained from the Solidarity Economy Enterprise Database. The Brazilian Government created the database to gather information regarding the status of the Solidarity Economy in the country.

The authors argue and find support for the idea that gender diversity in TMT positively influences firm performance. However, there is a point where higher presence of women in the business starts to be detrimental for firm performance. That is, the authors find that there is a curvilinear relationship between gender diversity in TMT and firm performance. Moreover, they found strong empirical evidence for the influence of compensation in strengthening the effect of gender diversity on firm performance.

The great potential that this study offers applied to the CBEs relies on the fact that these businesses are naturally oriented toward equality, so understanding how the unbalance in gender diversity may affect the firm performance could help us to understand if there is a disconnection between the theory and the practice in terms of how women are positioned.

The paper has important implications for corporate boards and policy-makers, suggesting the importance of increasing the number of women in boards of directors to benefit from the diversity in value, perspectives, background and skills they bring to TMTs. This study focuses on an under-researched context in terms of TMTs – CBEs.

This work shows that gender diversity in top on boards of CBE’s is positive which is aligned to the orientation toward equality that these businesses have. However, at the same time even although having more women is positive for financial performance, there is a saturation point from when the influences starts to be detrimental.

The authors consider that this study raises areas for further consideration in efforts to understand what are the boundary conditions of gender diversity in top teams.

How has upper echelons theory (UET) (Hambrick and Mason, 1984) been evolving over time? Through the historical discussion, this paper aims to provide an updated – and also innovative from some aspects – big picture on this famous approach to strategic management. In fact, after more than 30 years since its original conceptualization, the authors believe that the UE field is mature enough for a critical attempt to provide all those scholars and practitioners interested in strategic leadership with a comprehensive ground for future analyses, a ground which, to the authors’ knowledge, is still missing.

The authors mostly use a historical narrative to offer a critical account of the conceptual and methodological developments occurring under UE lenses over time. The authors believe that the historical approach can be particularly useful because it can help understand and explain why and how these developments have been conjectured and implemented.

Two mainly intertwined insights emerge from our analysis: on the one hand, the developments subsequent to the seminal 1984 UE model have gradually, although constantly, reduced its strongly voluntarist assumptions on strategic leadership toward more moderated co-evolutionary lenses; on the other hand, the emerging psychological and cognitive moderators of UE variables are presently reinforcing the centrality of dominant coalitions, in that they affect their decision-making processes and strategic choices.

From the critical discussion, a possible updated UE model based on co-evolutionary lenses finally emerges. Prospective research avenues in this management field are also provided.

Corporate illegal activities may result in fatal injuries and economic losses and have been widely reported in the construction industry. This study is to investigate the relationship between top management team (TMT) compensation and corporate illegal activities with the moderating effects of aspiration–performance discrepancies.

Using a multi-year sample of Chinese construction firms from 2011 to 2017, this paper employed a hierarchical logit regression model with fixed effects.

This study indicates that TMT compensation is positively related to the likelihood of corporate illegal activities. It also finds performance higher than aspirations would lower the probability of illegal activities while performance lower than aspirations also decreases the occurrence of illegal behaviors. Finally, the positive relationship between TMT compensation and illegal activities is strengthened by aspiration–performance discrepancies.

It recommended the design of executive compensation may need to be reconsidered. Next, companies need to carefully monitor top management team, especially when performance is lower than the desired level. Finally, debt-to-equity ratio deserves more attention for Chinese construction firms in suppressing illegal activities.

Given the mixed effects of TMT compensation, this study confirms its positive impact on corporate illegal behaviors. Consistent with the behavioral theory of the firm, it unveils the direct and moderating effects of aspiration-performance discrepancies. The findings are beneficial for evaluating firms' performance and considering the prevention of corporate fraudulent activities.

This paper aims to investigate the relationship between corporate social responsibility (CSR) and earnings management (EM) in US commercial banks and examines whether the chief executive officer (CEO) power can moderate this relationship.

For a sample of American commercial banks covering 2009–2018, several equations and regressions are used to measure the main proxies for bank EM. The authors use the fixed effects model and generalized method of moment to investigate the CSR–EM relationship.

The authors find a significant positive relation between CSR and EM. Moreover, the authors find that CEO power moderates the CSR–EM relationship. This study also suggests a bidirectional relationship between CSR and EM.

The findings of this paper have important policy implications for policymakers, regulators and investors in their attempts to constrain EM practices and enhance the quality of financial reporting in US commercial banks.

The study contributes to the literature by exploring the relationship between CSR practices and firm EM by particularly focusing on banking. This study offers new insights into whether the association between CSR practices and EM is moderated by the CEO power. To the best of the knowledge, the relationship between CSR and EM is not studied yet with the moderating role of CEO power.