Work

Executive compensation and firm performance: Evidence from Indian firms

Year: 2016

Type: article

Abstract: The study examines the relationship between executive compensation and firm performance among Indian firms. The evidence suggests that firm performance measured by accounting, as well as market-based measures, significantly affects executive compensation. We also test for the presence of persistence in executive compensation by employing the system-generalised methods of moments (GMM) estimator. We find significant persistence in executive compensation among the sample firms. Further, we report the absence of pay–performance relationship among the smaller sample firms and business group affiliated firms. Thus, our findings cast doubts over the performance-based executive compensation practices of Indian business group affiliated firms.

Source: IIMB Management Review

DOI: 10.1016/j.iimb.2016.07.002

Authors: Mehul Raithatha, Surenderrao Komera

Institutions: Indian Institute of Management Indore, IFMR Graduate School of Business

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,200