CEO Compensation and Performance of Commercial Banks

Akhigbe, Aigbe; Madura, Jeff; Ryan, Huldah A.

doi:10.1108/eb018654

“…Stock performance of the company is used as a determinant of CEO compensation (e.g. Core et al, 1999;Akhigbe et al, 1997). Many investors monitor their portfolios and gauge success as the improvement as gain in net worth.…”

Section: Stock Performancementioning

confidence: 99%

Determining total CEO compensation of selected US public companies

Mustafa

¹

2018

IJMF

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Purpose The purpose of this paper is to explore the effects of total assets, stock performances, CEOs’ tenures, ages, and board sizes on total CEO compensations of 249 publicly listed US companies over a nine-year period from 2004-2012. Design/methodology/approach Pedroni’s panel cointegration, generalized method of moments, and dynamic ordinary least squares methodologies are applied. Findings All variables are non-stationary in log-levels. The findings show significant positive effects of total assets and stock performances on total CEO compensations. The effects of CEO’s tenure and age as well as board size on total CEO compensation deem negative. However, short-run net interactive feedback effects are generally positive with some exceptions. Research limitations/implications The above variables matter in rewarding the CEOs. They should be carefully weighed in for proper formulation of CEO compensation policy. Originality/value This paper applies relatively new econometric tools for a large panel data set. This work considers some new variables for determining CEO compensation in USA. The findings are relatively new with empirical originality.

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“…US industry specific studies include those done by Akhigbe, Madura & Ryan (1997) in commercial banks, and Barber, Ghiselli & Deale (2006) in the restaurant segment of the hospitality industry. The Akhigbe et al (1997) study found that the accumulated human capital of CEOs and the commercial bank size were positively related to the total CEO remuneration which included salary, bonus, and stock options. The study also found that CEO remuneration had a positive significant relationship with both accounting-based performance measures and marketbased performance measures.…”

Section: Company Performance Measuresmentioning

confidence: 99%

CEO pay-performance sensitivity in the South African context

Bussin

¹

2015

SAJEMS

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The topic of executive pay-performance sensitivity has resulted in mixed research findings. Literature related to executive remuneration constructs, company performance measures and the underlying theories is critically reviewed in this article. The literature is compared to research findings within the South African context pre, during and post the Global Financial Crisis of 2008. The researcher found similar results in the South African context compared to research in other countries and industries. The research challenges the notion that there is one dominant theory driving CEO compensation. The principal-agent theory, supported by the optimal contract theory, are foremost during periods of strong economic performance, while the influence of managerial power and other behavioural theories appear to prevail during periods of weak economic performance. This article proposes some critical considerations in order to manage this tension.

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“…US industry specific studies include those done by Akhigbe, Madura & Ryan (1997) in commercial banks, and Barber, Ghiselli & Deale (2006) in the restaurant segment of the hospitality industry. The Akhigbe et al (1997) study found that the accumulated human capital of CEOs and the commercial bank size were positively related to the total CEO remuneration which included salary, bonus, and stock options. The study also found that CEO remuneration had a positive significant relationship with both accounting-based performance measures and marketbased performance measures.…”

Section: Company Performance Measuresmentioning

confidence: 99%

CEO pay-performance sensitivity in the South African context

Bussin

¹

2015

S. Afr. j. econ. manag. sci.

View full text Add to dashboard Cite

The topic of executive pay-performance sensitivity has resulted in mixed research findings. Literature related to executive remuneration constructs, company performance measures and the underlying theories is critically reviewed in this article. The literature is compared to research findings within the South African context pre, during and post the Global Financial Crisis of 2008. The researcher found similar results in the South African context compared to research in other countries and industries. The research challenges the notion that there is one dominant theory driving CEO compensation. The principal-agent theory, supported by the optimal contract theory, are foremost during periods of strong economic performance, while the influence of managerial power and other behavioural theories appear to prevail during periods of weak economic performance. This article proposes some critical considerations in order to manage this tension.

show abstract

CEO Compensation and Performance of Commercial Banks

Cited by 12 publications

References 28 publications

Determining total CEO compensation of selected US public companies

Determining total CEO compensation of selected US public companies

CEO pay-performance sensitivity in the South African context

CEO pay-performance sensitivity in the South African context

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