The Determinants of Executive Compensation in US REITs: Performance vs. Corporate Governance Factors

Ascherl, Claudia; Schrand, Liesa; Schaefers, Wolfgang; Dermisi, Sofia

doi:10.1080/09599916.2019.1653955

Cited by 7 publications

(6 citation statements)

References 29 publications

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“…With regards to control variables, we noted a statistically significant and positive effect of variable SIZE (company's total assets) on executive compensation. These findings also concur with the conclusions from analyses conducted for other markets (Ascherl et al, 2019;Abdalkrim, 2019;Wang et al, 2021). Despite the arguments that smaller firms can tend to outperform larger ones (Ding & Chea, 2021), the large firms, whose size reflects their ability to achieve economies of scale as well as market power, have also a great ability to invest a lot of talent and money in CEOs development, as well as pay high compensations.…”

Section: Discussionsupporting

confidence: 84%

“…Firstly, it concentrates on emerging markets and concerns the relationship between executive pay and firm performance from the perspective of corporate governance principles adopted in Poland, where The Continental model is more suitable (Jerzemowska et al, 2013). The current literature on these relationships has been largely focused on The Anglo-American model (Ascherl et al, 2019;Le et al, 2020;Lin & Shi, 2020;Wang et al, 2021) or the Asia-Pacific countries (Farooque et al, 2019;Cui et al, 2021;Ding & Chea, 2021;Chen & Hassan, 2022;Kayani & Gan, 2022). Our decision is motivated by the lack of global consensus in the literature about these relationships and the non-existing current research across the Central Eastern European (CEE) region.…”

Section: Introductionmentioning

confidence: 99%

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Executive compensation and the financial performance of Polish listed companies from the corporate governance perspective

Sajnóg

Rogozińska–Pawełczyk

2022

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Research background: The level of compensation earned by CEOs and the relationship between executive pay and companies? performance is one of the most widely studied issues in the corporate governance literature. Studies conducted in the last several decades have provided evidence that CEO pay should be aligned with accounting financial measures. Purpose of the article: The main purpose of this paper is to determine the relationship between executive compensation and organizational financial performance. In particular, the effect of net income and comprehensive income as the accounting measures of financial performance on executive compensation is compared. Methods: The research comprised listed companies on the Warsaw Stock Exchange (WSE). The role and effect of accounting financial measures on executive compensation are analyzed based on three regression models. The period of analysis spanned ten years, from 2009 to 2018. Findings & value added: There are three conclusions that can be drawn from the study. Firstly, executive compensation in the analyzed companies largely depends on the accounting measures of financial performance, based on net income and comprehensive income (excluding ROE). Secondly, its level is significantly and positively influenced by the company?s size, Tobin?s Q ratio, debt ratio, and dividend rate. Thirdly, comprehensive income has a stronger effect on executive compensation than net income. Our findings add some potentially noteworthy dimensions to the economic literature on corporate governance, which is especially important to apply in the CEE region and other emerging economies. The Anglo-American assumption of corporate governance and executive compensation policy might not be suitable for the realities in much of the world.

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Section: Discussionsupporting

confidence: 84%

Section: Introductionmentioning

confidence: 99%

Executive compensation and the financial performance of Polish listed companies from the corporate governance perspective

Sajnóg

Rogozińska–Pawełczyk

2022

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“…A CEO's time in office is another important indicator of managerial power. Longer-tenured CEOs are expected to have more influence over board members as collaboration and collegiality between CEOs and board members intensify over time (Ascherl et al ., 2019) and directors who oversee the compensation arrangements may tend to be hand-picked by longer-tenured CEOs (Shivdasani and Yermack, 1999). A CEO's time in office is calculated as the natural logarithm of the number of years since the current CEO became CEO ( LnTenure ).…”

Section: Methodsmentioning

confidence: 99%

Are CEOs rewarded for managerial ability? Evidence from nonprofit hospitals

Zhang¹

2023

JPBAFM

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PurposeMost prior studies investigating determinants of CEO compensation in nonprofit hospitals ignore how managerial ability affects compensation. This study aims to examine whether CEOs with greater ability to manage corporate resources efficiently receive more payment in nonprofit hospitals.Design/methodology/approachThis study employs a sample of 764 observations from 85 Pennsylvania nonprofit hospitals for the period 2010–2020.FindingsThis study finds a positive and statistically significant association between managerial ability and CEO compensation. The results are robust to alternative measures of managerial ability.Practical implicationsThe measure of managerial ability proposed in this study could be used by boards of directors to quantify, evaluate and benchmark CEO ability. The results are also relevant to policymakers, stakeholders and the public interested in understanding the determinants of CEO compensation in nonprofits.Originality/valueThis study is among the first to use a more precise measure of managerial ability, which captures the unobserved manager-specific aspects of CEO ability. In addition, this study contributes to the literature by providing evidence that CEO's ability to manage hospital resources efficiently plays an essential role in designing executive compensation contracts.

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“…This positive correlation is mainly reflected in absolute profitability measures such as EBITDA (earnings before interest, tax, depreciation and amortisation) and net profit. Ascherl et al ( 2019) [18] studied whether executive compensation programs in the US real estate investment trust (REIT) industry are determined solely by performance or by the power mechanism of the CEO that has an important influence on the negotiation at board level. Found that after the financial crisis, the relative importance of cash bonuses in executive compensation contracts decreased by more than half.…”

Section: The Relationship Between Executive Compensation and Corporat...mentioning

confidence: 99%

Incentive Executive Compensation Management System: A Literature Review

2022

2022 2nd International Conference on Management Science and Industrial Economy Development (MSIED 2022)

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Senior executives control the operation of the enterprise. Whether the executive compensation management is reasonable and whether it can meet the needs of executives will directly affect the operation efficiency and management efficiency of the whole enterprise. In modern enterprises, the separation of ownership and management is a major feature, and the emergence of agency issues is inevitable, mainly due to adverse selection and moral hazard under the background of information asymmetry. Determining executive compensation by evaluating corporate performance, on the one hand, can mobilize the enthusiasm of executives; on the other hand, it can effectively reduce the agency cost caused by information asymmetry. Based on the principal-agent theory, this paper firstly discusses the agency problem caused by the information asymmetry between shareholders and executives, and then points out that executive compensation, as an incentive means, can effectively alleviate the agency conflict. Previous studies have shown that there is a positive correlation between executive compensation and corporate performance. Then, this paper summarizes the research on the compensation dispersion and compensation stickiness in executive compensation management, so as to put forward some considerations and suggestions for the design of executive compensation management system. Finally, it makes a summary and puts forward the prospect of future research on the shortcomings of existing studies.

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The Determinants of Executive Compensation in US REITs: Performance vs. Corporate Governance Factors

Cited by 7 publications

References 29 publications

Executive compensation and the financial performance of Polish listed companies from the corporate governance perspective

Executive compensation and the financial performance of Polish listed companies from the corporate governance perspective

Are CEOs rewarded for managerial ability? Evidence from nonprofit hospitals

Incentive Executive Compensation Management System: A Literature Review

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