Dynamics of CEO compensation: Old is gold

Adhikari, Hari Prasad; Bulmash, Samuel B.; Krolikowski, Marcin W.; Sah, Nilesh B.

doi:10.1016/j.qref.2015.01.007

Cited by 16 publications

(7 citation statements)

References 38 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Although the association between age and pro-social decision-making is still ambiguous (Jain and Jamali 2016), Adhikari et al (2015) have shown that due to an "age advantage" older CEOs are perceived to be ethical, reliable, and responsible. Since we expect that sustainable CEO compensation scheme should account for individual insights and attitudes toward economic, environmental, and social aspects of corporate activities, it seems possible that the CEO's age can have an impact on the composition of their performance measure mix.…”

Section: Future Research On the Determinants Of Sustainable Ceo Compensationmentioning

confidence: 99%

Determinants and effects of sustainable CEO compensation: a structured literature review of empirical evidence

Winschel

Stawinoga

2019

Manag Rev Q

View full text Add to dashboard Cite

Sustainability-oriented CEO compensation is being widely discussed among policy makers, corporate practice, and academia. To date, management literature has yielded a growing body of empirical results on the determinants and effects of sustainable CEO compensation. Primarily, empirical studies analyze whether and to what extent sustainability-related issues determine the design of sustainable CEO compensation and how sustainability-oriented CEO compensation impacts corporate performance. However, the scattered nature of this research field has impeded an overarching empirical substantiation of the arguments in favor or against a sustainable CEO compensation. This structured literature review addresses this gap by analyzing 37 empirical studies on the key determinants and effects of sustainable CEO compensation. Using a multi-level analysis, we contribute to the discussion on sustainable CEO compensation by systematically identifying the central empirical insights and methodological and content-related foci within this research area. In summary, this review provides regulators, boards, management, investors, and other stakeholders with academic evidence on the determinants and effects of sustainability-oriented CEO compensation design. In addition to critically reflecting on the current state of research, we recommend paths for future research on sustainable CEO compensation.

show abstract

Section: Future Research On the Determinants Of Sustainable Ceo Compensationmentioning

confidence: 99%

Determinants and effects of sustainable CEO compensation: a structured literature review of empirical evidence

Winschel

Stawinoga

2019

Manag Rev Q

View full text Add to dashboard Cite

show abstract

“…Lately, academic studies have presented evidence supporting the idea that corporate policies can be driven by individual personality traits of top executives. Studies that resonate with this idea include Gibbons and Murphy (1992), Prendergast and Stole (1996); Barker and Mueller (2002), Bertrand and Schoar (2003), Davidson et al (2007), Huang et al (2012), Yim (2013), Serfling (2014) and Adhikari et al (2015). We pursue this direction of research and investigate the unexplored association between the behavioural aspect of the top executives and the firm’s short‐term financial management.…”

Section: Introductionmentioning

confidence: 99%

Working capital (mis)management – impact of executive age

Adhikari

Krolikowski

Malm

et al. 2019

Accounting & Finance

Self Cite

View full text Add to dashboard Cite

Several recent studies have used the upper echelons theory to explain the impact of personal traits of top executives on various corporate policies. In this, first of its kind, study we find that older executives invest more in working capital; take longer to convert inventories to cash; and pay their suppliers sooner. These findings are consistent with the argument that risk aversion increases with executive age. Our findings indicate that executive age has significant bearing on working capital management policies. This study also initiates new avenues in research relating behavioral aspect of executives with short‐term financial management.

show abstract

“…These CEOs may be more powerful and they may prefer less risky forms of pay. Further, Adhikari et al (2015) conclude that the level of CEO compensation among US companies has increased considerably for older executives as compared to their younger counterparts after adopting the Sarbanes-Oxley Act (SOX). In contrast, Mcknight et al (2000) find a weak relation between CEO age and CEO salaries and the association between CEO age and bonus appears to be non-linear in nature for a sample of UK firms.…”

Section: Ceo Personal Traits and Pay Ratiomentioning

confidence: 99%

“…The relation between CEO age and CEO compensation has been examined by several studies. Adhikari et al (2015) document that CEO age is an important variable to consider in the corporate setting of US firms. They argue that older CEOs are rewarded with higher pays than their younger counterparts to encourage risk taking and ethical behaviour.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

The moderating effects of CEO power and personal traits on say‐on‐pay effectiveness: Insights from the Anglo‐Saxon economies

2022

View full text Add to dashboard Cite

This study investigates the efficacy of say-on-pay (SOP) regulation in mitigating excessive CEO compensation and how it is affected by CEO personal traits and the power distribution inside a corporation. Using IV-GMM method and a sample of 1,931 firms from Australia, Canada, the UK, and the USA, we find that shareholder voices are successful in reducing the pay gap between CEOs and the median employee, regardless of the exact nature of the regulation. In addition, older CEOs are associated with lower pay ratios and there are some evidences suggesting that older or female CEOs enhance SOP effectiveness.Further, power distribution manifested through corporate governance mechanisms matters, as increasing board size and director and audit committee independence reduce pay ratio. A measure of CEO power, CEO pay slice, has a significant and large positive explanatory power for the model and its exclusion can greatly exaggerate the estimated impact of SOP on pay ratio. Another measure of CEO power, CEO duality, appears to enhance the potency of SOP slightly. There is also some evidence indicating that ownership concentration enhances SOP effectiveness. Our findings have implications for companies, investors, and regulators concerning the importance of power balance structure within corporations.

show abstract

Dynamics of CEO compensation: Old is gold

Cited by 16 publications

References 38 publications

Determinants and effects of sustainable CEO compensation: a structured literature review of empirical evidence

Determinants and effects of sustainable CEO compensation: a structured literature review of empirical evidence

Working capital (mis)management – impact of executive age

The moderating effects of CEO power and personal traits on say‐on‐pay effectiveness: Insights from the Anglo‐Saxon economies

Contact Info

Product

Resources

About