Excess executive compensation and corporate governance in the United Kingdom and Spain: A comparative analysis

Marín, Gregorio Sánchez; Lucas‐Pérez, María Encarnación; Baixauli‐Soler, J. Samuel; Main, Brian G. M.; Mínguez‐Vera, Antonio

doi:10.1002/mde.3564

Cited by 7 publications

(7 citation statements)

References 108 publications

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“…Similar to studies on incentive contracting based on the principal-agency theory ( Garen, 1994 ; Sánchez-Marín et al, 2022 ), Lee et al (2003) state that, based on transaction costs, an incompleteness of contracts and the hazards of opportunism in engaging agents have also been found. There are competing labor markets with outside agents available to take over the business.…”

Section: Introductionmentioning

confidence: 59%

“…Existing studies on executive compensation mainly focus on three aspects: the concept and composition of compensation ( Murphy, 1999 ; Edmans et al, 2017 ), the comparison of executive compensation across countries and institutional environments (see Herdan and Szczepanska, 2011 ; Sánchez-Marín et al, 2022 ), and the factors affecting executive compensation, including performance ( Jensen and Murphy, 1990 ; Elsayed et al, 2018 ), size ( Herdan and Szczepanska, 2011 ; Iatridis, 2018 ), internal control (see cook et al, 2019 ; Lozano-Reina and Sánchez-Marín, 2020 ), ownership structure ( Shan and Walter, 2016 ; Sánchez-Marín et al, 2022 ), the institutional environment (Sahakiants and Festing, 2019; Scherer, 2020 ), and executives’ personal factors ( Humphery-Jenner et al, 2016 ; Conyon et al, 2019 ).…”

Section: Introductionmentioning

confidence: 99%

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The implications of inefficient markets for executive pay comparison: The case of China and Poland

Liu

2022

Front. Psychol.

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Although there is a large volume of literature on executive compensation, few of these studies have focused on executive pay comparisons and even fewer on the antecedents of executive pay comparisons. This paper fills this gap in executive pay comparison literature by beginning with executive pay comparison behaviors, and then the elements that influence executive pay comparison behaviors are discussed. A questionnaire survey found that executive pay comparison behaviors exist in both China and Poland. Furthermore, the findings show that the factors influencing executive pay comparison behaviors are different in the two countries. In China, there is a significant relationship between executive pay comparison behaviors and the dysfunctional agent market, herd mentality. And in Poland, there is a significant relationship between executive pay comparison behaviors and the ineffectiveness of government intervention, herd mentality. The implications of the study are also discussed.

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Section: Introductionmentioning

confidence: 59%

Section: Introductionmentioning

confidence: 99%

The implications of inefficient markets for executive pay comparison: The case of China and Poland

Liu

2022

Front. Psychol.

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“…Executive compensation remains one of the most controversial topics in the literature, attracting considerable public interest and multidisciplinary attention from scholars (Kaplan, 2008; Kumar & Zattoni, 2016b; Sánchez‐Marín et al, 2022; Walsh, 2008). The well‐documented lack of efficiency and equity in executive pay policies (Aguinis et al, 2018; Chu et al, 2021; Kumar and Zattoni, 2016b) has translated into more intense and demanding shareholder activism (Crawford et al, 2021; Ertimur et al, 2011; Goranova & Ryan, 2014) fostering the implementation of new corporate governance mechanisms among listed firms worldwide—with SOP figuring prominently amongst such mechanisms (Lozano‐Reina & Sánchez‐Marín, 2020; Stathopoulos & Voulgaris, 2016).…”

Section: Conclusion and Discussionmentioning

confidence: 99%

“…This legal change may intensify shareholder activism, which is analyzed by focusing mainly on the binding period. Thirdly, the United Kingdom-characterized by the Anglo-American corporate governance model-has experienced several movements toward limiting abusive, misaligned, and excessive CEO pay designs (Sánchez-Marín et al, 2022).…”

Section: Sample and Datamentioning

confidence: 99%

Shareholder activism in listed family firms: Exploring the effectiveness of say‐on‐pay on CEO compensation

Sánchez‐Marín,

Lozano‐Reina,

Baixauli‐Soler

2023

Business Ethics Env & Resp

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The widespread critical evidence surrounding executive compensation of listed corporations has boosted shareholder activism in recent decades. The say‐on‐pay (SOP) mechanism—a vote in which shareholders express their (dis)agreement with executive pay designs—is one of the corporate governance mechanisms that has led to this activism among listed firms. Merging agency and socioemotional wealth (SEW) arguments, this paper analyzes how effective SOP voting results are among listed family firms in terms of CEO compensation efficiency and equity. Using a sample of UK listed firms from 2011 to 2018, our results show that SOP effectiveness is positively influenced by family ownership and is strongly moderated by family involvement in management and in governance as well as by family generation. Our findings stress the strong family effect and the ethical perceptions of family shareholders on SOP voting, showing how family participation in the firm encourages fairer and more aligned CEO compensation packages. SOP institutional and practical implications oriented to preserve shareholder value and family wealth are finally outlined.

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“…3.2.3 Control Variables. In addition to the variable of interest related to the composition of the Remuneration Committee, other variables related to the profile of the directors and the characteristics of the company and the board of directors have been used as explanatory variables since they are commonly used in the literature (Arrondo et al, 2008or S anchez-Mar ın et al, 2022.…”

Section: Variablesmentioning

confidence: 99%

The composition of the remuneration committee and the vertical pay gap: the role of proprietary directors in Spain

Fraile

Fradejas

2023

BJM

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PurposeThis study investigates whether the proportion of proprietary directors (blockholders or their representatives) on the board's remuneration committee influences vertical pay inequality in Spanish listed companies and whether this relationship can be conditioned by the concentration of ownership.Design/methodology/approachThe sample contains information on the individual compensation of 1048 directors of 57 Spanish listed firms during the period 2013–2018 making up an unbalanced panel with 3565 observations. Panel data regressions are used to study how the presence of proprietary directors on the remuneration committee influences the remuneration of directors, focusing not on their absolute remuneration levels, but rather on their relationship to the average remuneration of the organization's employees (as a measure of vertical pay inequality within the company). The authors also investigate whether this relationship is conditioned by firm ownership concentration.FindingsThe results indicate that the presence of proprietary directors on the remuneration committee acts as a mechanism to reduce vertical pay inequality, even in the context of high ownership concentration.Originality/valueUnlike the majority of previous research dedicated to the independence of the remuneration committee, this study focuses on the role played by proprietary directors. The results help elucidate the importance of proprietary directors to properly monitor and restrain directors' compensation in contexts of high ownership concentration.

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Excess executive compensation and corporate governance in the United Kingdom and Spain: A comparative analysis

Cited by 7 publications

References 108 publications

The implications of inefficient markets for executive pay comparison: The case of China and Poland

The implications of inefficient markets for executive pay comparison: The case of China and Poland

Shareholder activism in listed family firms: Exploring the effectiveness of say‐on‐pay on CEO compensation

The composition of the remuneration committee and the vertical pay gap: the role of proprietary directors in Spain

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