Corporate governance and CEO compensation in Indian firms

Jaiswall, Sudhir S.; Bhattacharyya, Asish K.

doi:10.1016/j.jcae.2016.06.001

Cited by 46 publications

(58 citation statements)

References 51 publications

(130 reference statements)

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“…From the agency theory perspective, larger boards are vigilant in reviewing management actions and minimize CEO compensation (Guest, 2008). Contrarily, stewardship theory argues, smaller boards enhance board decision-making due to better coordination among its members (Jaiswall & Bhattacharyya, 2016).…”

Section: Board Attributes and Ceo Compensation 221 | Board Sizementioning

confidence: 99%

“…One strand of studies reveal that board size helps in limiting CEO compensation, whereas another strand of literature document positive impact of board size on CEO compensation (Core, Holthausen, & Larcker, 1999). In fact, Jaiswall and Bhattacharyya (2016) argue that in Indian setup the role of board is limited to strategic advising and passive monitoring of CEO compensation (Booth, Cornett, & Tehranian, 2002 (Arora & Sharma, 2016). The managerial power theory argues that board meetings, comprising of external directors, are less likely to monitor firms' activities and CEO compensation effectively.…”

Section: Board Attributes and Ceo Compensation 221 | Board Sizementioning

confidence: 99%

“…Contrarily, equivocal findings are reported from developing countries such as India and Pakistan on the influence of board attributes, executive characteristics, ownership structure, and firm performance on CEO compensation. While some studies have reported a positive association of board attributes and ownership structure with CEO compensation (Sheikh, Shah, & Akbar, 2018), others have documented an inverse relationship between the two (Croci, Gonenc, & Ozkan, 2012;Jaiswall & Bhattacharyya, 2016), and still others report no relations (Balasubramanian, Barua, & Karthik, 2015;Jaiswall & Firth, 2009). The inconclusive findings create scope to reinvestigate and ascertain the implication of corporate governance in the determination of CEO compensation, particularly in an emerging economy like India.…”

Section: Introductionmentioning

confidence: 99%

“…A good governance structure tries to instill an ethical climate within firms to enhance accountability, trust, transparency, and reduce fraudulent practices. Few studies have investigated the impact of recent governance regulations on CEO compensation in Indian firms (Jaiswall & Bhattacharyya, 2016;Saravanan, Srikanth, & Avabruth, 2017). The evidence generated so far on panel data using pooled and fixed-effect models suffers from omitted variable bias, inflated statistical significance, and generalizability; and poses difficulty to draw conclusive evidence (Graham, Li, & Qiu, 2012;Petersen, 2009).…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Does corporate governance affect CEO compensation in Indian manufacturing firms?

Patnaik

Suar

2020

Journal of Public Affairs

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This study examines the effects of (a) chief executive officers (CEO) pay dynamics, (b) corporate governance characteristics, and (c) the impact of environmental, social, and governance disclosure practices on CEO compensation. Data of 282 Indian manufacturing firms were collected from Bloomberg database from 2013–14 to 2018–19. This study uses Generalized Method of Moments estimation technique to assess the impact of corporate governance on CEO compensation. The empirical estimates reveal that increase in board size, board independence, women director in board, CEO duality, and institutional holdings reduced CEO compensation. Furthermore, the environmental, social, and governance disclosure confirmed that higher firm disclosures help to streamline CEO compensation. It has also been found that CEOs' current compensation is affected by their previous pay. This study corroborates the objectives of Companies Act 2013 to streamline the governance practices for optimizing CEO compensation.

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Section: Board Attributes and Ceo Compensation 221 | Board Sizementioning

confidence: 99%

Section: Board Attributes and Ceo Compensation 221 | Board Sizementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Does corporate governance affect CEO compensation in Indian manufacturing firms?

Patnaik

Suar

2020

Journal of Public Affairs

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“…Those CEOs who belong to the controlling shareholders' group may also influence the remuneration committee that fixes the CEO's compensation ( Jaiswall and Frith, 2009). Jaiswall and Bhattacharya (2016) conclude that the ownership characteristics of Indian private sector firms are positively related to ownership structure. The relationship between ownership characteristics and ownership structure would result in lowering the standards of corporate governance of the firm.…”

Section: Controlling Shareholder Duality and Executive Compensationmentioning

confidence: 79%

Relationship between gray directors and executive compensation in Indian firms

Prasad

Sankaran

Prabhu

2019

EJMBE

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Purpose The purpose of this paper is to examine the empirical relationship between gray directors (non-executive non-independent directors) and executive compensation among companies listed in India’s National Stock Exchange (NSE). The paper also examines the possible interplay of relationships between controlling shareholder duality (controlling shareholder being the CEO), ownership category and executive compensation. Design/methodology/approach A sample of 438 firms listed in the NSE of India was studied using data spanning five financial years, 2012–2013 to 2016–2017. Findings Empirical evidence suggests that there is a positive association between the proportion of gray directors on the board and executive compensation. The sensitivity of executive compensation to gray directors is found to be higher among family controlled firms. This research has also found that CEOs who belong to controlling shareholder groups received higher pay than professional CEOs. The authors conjecture that these results suggest cronyism and may contribute to lower levels of corporate governance practices in the country. Research limitations/implications The hybrid board structure, which India has adopted with the desire to bring the best of Anglo Saxon and Japanese board philosophies, has paradoxically led to self-serving boards. Exploration of alternative thinking to bring about changes in the regulatory framework is, therefore, necessary. Originality/value Serious problems are identified with the philosophy behind board composition mandated by Listing Requirements for Indian firms with empirical evidence showing how the existing rules generate cronyism and unfairness to minority shareholders.

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The interplay of cash flow uncertainty and firm life cycle on sustainability disclosure

Shiljas,

Kumar

2024

Bus Strat Env

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This study investigates the role of cash flow uncertainty and firm life cycle on sustainability disclosures using environmental, social and governance (ESG) disclosure score data. We conduct our analysis on a sample of 190 Indian firms for a period of 12 years from 2010 to 2021. Drawing upon the real‐option theory and organisational‐inertia theory, we document a negative impact of cash flow uncertainty and firm life cycle on a firm's commitment to disclose sustainability information. We also find a significant impact of managerial risk inclination and risk tolerance at the firm level in moderating the above relationships. Our findings can help managers equip themselves to meet the challenges of sustainability commitments during cash flow constraints and firm life‐cycle transitions. Moreover, our results can also help policymakers in assessing the need to enforce sustainability disclosures depending on the hurdles confronted by a firm.

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Corporate governance and CEO compensation in Indian firms

Cited by 46 publications

References 51 publications

Does corporate governance affect CEO compensation in Indian manufacturing firms?

Does corporate governance affect CEO compensation in Indian manufacturing firms?

Relationship between gray directors and executive compensation in Indian firms

The interplay of cash flow uncertainty and firm life cycle on sustainability disclosure

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