Agency theory predicts that incentive compensation aligns management interests
with those of shareholders, and that CEO pay is a solution to the agency costs
arising from the separation of ownership and management. Amongst corporate
governance literature, several researchers have focused on executive compensation
and its link with firm performance. International studies document evidence that
CEO remuneration is positively correlated with corporate performance and firm size.
Applying Generalized Method of Moments (GMM) estimator to a sample of BEL-20
Index firms for the years 2004 to 2010, this article examines the association
between remuneration — both of CEOs and top management teams — and
variables such as size, performance, CEO characteristics and “corporate
governance” structure. Our results document a CEO pay-size association as positive
and statistically significant, and a positive weak relation between CEO
compensation and performance.
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Author Name: Jonathan BAUWERAERTS, Julien VANDERNOOT & Thomas TYRANT
URL: View PDF
Keywords: compensation, chief executive officer, corporate governance, performance, top management team
ISSN: 1694-5948
EISSN: 1694-5972
EOI/DOI:
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