Legitimacy and corporate governance determinants of executives' remuneration disclosures

Abstract

Purpose – The purpose of this paper is to provide Australian evidence on both the extent and key determinants of discretionary disclosure in company annual reports of information about top executives' share rights, options and termination entitlement. Such information has value‐relevance to shareholders and the public, but prior evidence is lacking about the factors that influence top managements' decisions to voluntarily disclose or withhold personally sensitive details about their own remuneration.Design/methodology/approach – The extent and nature of executive remuneration disclosure are obtained from the content analysis of annual reports of 191 Australian listed companies for the years 2003 and 2004, prior to a more detailed prescriptive regulatory environment occurring in this area when international financial reporting standards became effective in 2005. To explain the factors that could influence managements' decisions about the extent of discretionary disclosure details concerning their own remun...