2020
DOI: 10.3846/jbem.2020.11788
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Directors’ Compensation. What Really Matters?

Abstract: In the current scenario of increasing social inequality, the debate over the compensation received by directors and executives of large listed companies, and its justification, has intensified. Drawing on Agency Theory and Human Capital Theory, a multilevel analytical technique is used in this paper to examine the influence of firm-level variables and director-level variables on the individual compensation of the members of the board. The results obtained for the continental European context (Spain in particul… Show more

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Cited by 17 publications
(21 citation statements)
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“…This study tries to measure the main determinants of directors' compensation in the Spanish economy during the period 2015-2017. The literature on Spain is very scarce in this field-see, for instance, Manzaneque et al (2011), García Martín andHerrero (2019), Acero and Alcalde (2020) and Melón et al (2020). The mixed model that we propose in order to estimate the compensation received by an individual member of a BoD as a function of his/her personal attributes and the firm characteristics can be derived from the hedonic theory of wages rooted in the seminal work of Rosen (1974)-see also Eisfeldt and Kuhnen (2013) and Cahuc et al (2014).…”
Section: Introductionmentioning
confidence: 99%
“…This study tries to measure the main determinants of directors' compensation in the Spanish economy during the period 2015-2017. The literature on Spain is very scarce in this field-see, for instance, Manzaneque et al (2011), García Martín andHerrero (2019), Acero and Alcalde (2020) and Melón et al (2020). The mixed model that we propose in order to estimate the compensation received by an individual member of a BoD as a function of his/her personal attributes and the firm characteristics can be derived from the hedonic theory of wages rooted in the seminal work of Rosen (1974)-see also Eisfeldt and Kuhnen (2013) and Cahuc et al (2014).…”
Section: Introductionmentioning
confidence: 99%
“…The managerial power approach depicts CEOs as rent seekers who have a significant degree of influence over the board of directors and their remuneration. Bussin and Ncube (2017) and Acero and Alcalde (2019) state that CEOs are able to exploit their advantage to extract higher remuneration from the organisation. Evidently, where managerial power exists, the board's ability to objectively set remuneration is diminished, and hence the board does not operate at arm's length in these transactions (Bebchukt, Walker, & Friedtt, 2002).…”
Section: Managerial Powermentioning
confidence: 99%
“…Given the nature and complexity of the role, CEOs are typically highly educated, skilled, and experienced individuals who have gained management prowess through their tenure in leadership roles (Acero & Alcalde, 2019, Adams, 2019. To acquire and retain individuals of this calibre and to influence actions that drive performance within the organisation to maximise shareholder returns, a wage premium may be necessary and is used as an incentive (Morton, 2018).…”
Section: Introduction Orientationmentioning
confidence: 99%
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“…However, over -the-top compensation plans have attracted negative attention from the public, and whether senior management deserves such payments became questionable after the 2008 economic crisis. According to Acero & Alcalde (2020), the economic performance of a company is independent of the compensation of senior management. This finding suggests that committing fraud has nothing to do with the payments made to top management; instead, fraud is more related to the incentives given to people.…”
Section: Introductionmentioning
confidence: 99%