Work

Corporate Governance and the CEO Pay–Performance Link: Australian Evidence

Year: 2013

Type: article

Abstract: We examine the influence of corporate governance mechanisms, namely blockholdings and board structure, on CEO pay–performance sensitivity in listed Australian firms. Results highlight blockholders' role in shaping observed pay–performance associations and their impact varying with their independence and relative magnitude of ownership. Monitoring blockholders increase the sensitivity of long‐term at‐risk pay to performance, better aligning manager and shareholder interests. However, consistent with a shorter investment horizon, insider blockholders increase (decrease) the responsiveness of cash bonuses (long‐term at‐risk pay). Finally, consistent with them affording less‐effective monitoring, larger boards raise (lower) the sensitivity of known pay (long‐term at‐risk pay) to performance.

Source: International Review of Finance

DOI: 10.1111/irfi.12012

Authors: Emma Schultz, Gloria Y. Tian, Garry Twite

Institutions: Australian National University, UNSW Sydney, The University of Texas at Austin

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

OpenAlex ID: W3123733010

FWCI: 21.99

Cites: 51

Cited by: 54

Related to: 10