Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2018.1456951
Performance sensitivity of executive pay: the role of ownership structure, board leadership structure and board characteristics
Aylin Ataay
orcid.org/0000-0001-5150-1946
; Management Department, Galatasaray University, Istanbul, Turkey
Sažetak
This study first investigates the effect of firm performance on executive
pay in listed firms in Turkey, an emerging market from 2009 to 2013. The
results reveal a positive and significant link between firm profitability
and executive pay: executive pay is sensitive to performance. The
question of whether internal corporate control mechanisms play a
significant role in the association between executive pay and firm
profitability is revisited. Executive pay is weakly tied to profitability
when the ownership concentration is high. We expected that,
following the managerial power propositions, leadership duality
and board size will weaken performance sensitivity of executive pay,
with the impact of board independence on this sensitivity being the
opposite. However, it was found that only board leadership duality
and board size negatively affect the association between return on
equity and executive compensation. This study concludes that the
performance sensitivity of pay is weaker when executives have more
control over decisions, especially those related to their compensation,
and when the board of directors’ monitoring effectiveness is relatively
low.
Ključne riječi
Executive compensation; corporate governance; ownership structure; board of directors; firm performance; emerging economy
Hrčak ID:
206098
URI
Datum izdavanja:
3.12.2018.
Posjeta: 1.694 *