Say on pay and executive compensation: A systematic review and suggestions for developing the field

Lozano‐Reina, Gabriel; Marín, Gregorio Sánchez

doi:10.1016/j.hrmr.2019.01.004

Cited by 33 publications

(41 citation statements)

References 76 publications

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“…The systematic literature review employs a specific methodology to locate research to select and evaluate the contributions made by each study and analyze and synthesize the data [23]. For Denyer and Tranfield [16], it consists of a specific methodology that locates existing studies, selects and evaluates contributions, analyzes and synthesizes data and reports the evidence in such a way that allows reasonably clear conclusions about what is and what is not is known.…”

Section: Systematic Literature Reviewmentioning

confidence: 99%

Family Business Management: A Case Study in the Portuguese Footwear Industry

Hounsell

Coelho

Sousa

et al. 2021

Journal of Open Innovation: Technology, Market, and Complexity

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The family business is one of the world economy’s leading drivers, playing a significant role in countries’ economic and social development. Portugal is a country very dependent on this type of companies, which makes this study important, not only for discussing the problem in this scientific field but also for understanding family business characteristics in a country so dependent on this type of business. In this sense, this research work’s general objective is to understand the reality of the management of family businesses in the footwear industry, through the vision of the CEO’s of five companies in the North of Portugal. The present study is qualitative, as interviews were carried out with five CEOs of family businesses. The authors collected the participants’ reports between June and July 2019, in a single moment, through a face-to-face interview held at their respective workplaces, after prior scheduling. The interviews were recorded using an audio recorder and later transcribed and imported for analysis. The results obtained demonstrated that these organizations contribute enormously to the country’s economic and social development. This study also contributes to improving the understanding of the subject under analysis, through interviews with CEOs in the footwear industry in the Northern region of Portugal, exposing in more depth this representative and emerging sector, in a country mostly characterized by family businesses. It also aims to contribute to understanding the main determinants and characteristics of family businesses in the literature, like family businesses and performance, namely, ownership, professionalization, company–family relationship, succession, management and performance practices. With this study’s results, it is also expected that they may be susceptible to discussion and comparison with family businesses from other countries and from different business areas.

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Section: Systematic Literature Reviewmentioning

confidence: 99%

Family Business Management: A Case Study in the Portuguese Footwear Industry

Hounsell

Coelho

Sousa

et al. 2021

Journal of Open Innovation: Technology, Market, and Complexity

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“…Although the evidence remains inconclusive, most SOP-related literature establishes that SOP promotes more aligned compensation designs (Lozano-Reina and Sánchez-Marín, 2020). Correa and Lel (2016), who carry out a prominent cross-country study, point out that in countries where SOP has been adopted it seems to have proven effective since its implementation, and has led to an overall improvement in executive compensation compared to countries that have not adopted it.…”

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

“…Ferri and Maber (2013) point out that boards tend to remove controversial pay practices when high SOP dissent is received at the general meeting, and Burns and Minnick (2013) evidence that boards modify the pay mix after implementing SOP, tending toward designs that are more in line with company interests. This voting not only stands out for the effect of high dissent on subsequent pay designs but also for the persuasive effect that SOP-related legislation has on boards and compensation committees, which might even improve the linkage between compensation and shareholders' interests before voting takes place (Lozano-Reina and Sánchez-Marín, 2020).…”

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

“…Despite it only having been implemented recently, many studies have focused on SOP effectiveness, with the latter being seen as a way in which voting capacity can get boards and compensation committees to promote compensation [1] that is more aligned with firm interests (Correa and Lel, 2016; Ferri and Maber, 2013; Kimbro and Xu, 2016; Stathopoulos and Voulgaris, 2016). The evidence regarding the impact of SOP on executive pay has, however, proved inconclusive (Lozano-Reina and Sánchez-Marín, 2020). While most research has focused on the main effects of SOP on executive compensation (e.g.…”

Section: Introductionmentioning

confidence: 99%

“…Taking this into consideration, further investigation must incorporate additional moderating factors in order to better explain SOP effectiveness (Obermann and Velte, 2018). In this vein, Lozano-Reina and Sánchez-Marín (2020) point out managerial discretion as one of the key determinants in the understanding of SOP effectiveness. Defined as the latitude of action available to executives in strategic decision-making (Hambrick and Finkelstein, 1987), past literature has shown its importance when explaining executive pay policies (Van Essen et al , 2015; Finkelstein and Boyd, 1998; Rajagopalan and Finkelstein, 1992; Wangrow et al , 2015).…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Managerial discretion, say on pay, and CEO compensation

Baixauli‐Soler

Lozano‐Reina

Marín

2020

Self Cite

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PurposeThe purpose of this paper is to analyze the influence of managerial discretion on the effectiveness of say on pay (SOP) as a governance mechanism. This goal covers an important gap since the issue of how effective SOP is in promoting more aligned compensation has proved somewhat controversial.Design/methodology/approachThis empirical research opted for a panel methodology for the period 2003–2017, using a sample of large UK listed-companies (specifically, 3,445 firm-year observations). Data were obtained from several sources (Manifest Ltd, BoardEx, Worldscope, Factset Ownership and DataStream).FindingsResults show that managerial discretion plays an important role in the effectiveness of SOP as a mechanism for increasing aligned CEO compensation. While individual discretion (latitude of objectives) exerts a negative effect, contextual discretion (latitude of action) increases SOP effectiveness. The global effect of managerial discretion is positive when there is high level of both individual and contextual discretion.Originality/valueThis empirical study provides evidence concerning an emerging topic in the literature regarding the impact of SOP as a shareholder activism mechanism of corporate governance on executive compensation. By taking managerial discretion into consideration as a relevant moderating factor, it also offers a better explanation of SOP effectiveness as a governance mechanism.

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

et al. 2022

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Literature on executive compensation has relatively neglected the impact of institutional governance contexts. Regarding filling this gap, this study examines the influence of governance mechanisms on excess executive compensation comparing a set of listed UK and Spanish firms on an 8‐year panel data. Findings indicate that Spanish firms are characterized by higher excess executive compensation than UK firms because of the less effectiveness of ownership structure and board of directors. Differences in concentration and structure of ownership as well as in composition and size of boards result in more aligned executive compensation design in the UK firms.

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Say on pay and executive compensation: A systematic review and suggestions for developing the field

Cited by 33 publications

References 76 publications

Family Business Management: A Case Study in the Portuguese Footwear Industry

Family Business Management: A Case Study in the Portuguese Footwear Industry

Managerial discretion, say on pay, and CEO compensation

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

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