Managerial Compensation Research Articles

Pengaruh Tata Kelola, Koneksi Politik, dan Kompensasi Dewan Direksi Terhadap Pengungkapan Tanggung Jawab Sosial

<strong><em><span lang="IN">Companies must meet public expectations to maintain the social contract. This study aims to determine the effect of corporate governance, political connections, and board of directors compensation on social responsibility disclosure. This study uses a quantitative approach with a positivist paradigm. The population of this study is all issuers of the manufacturing sector listed on the Indonesia Stock Exchange in 2021. The research sample is 294 companies. Data were analyzed using multiple regression. The results show that corporate governance positively affects social responsibility, while political connections and board of directors compensation have no effect. Investors and creditors are advised to invest in companies with good governance and disclose CSR activities. This study uses a more comprehensive index measurement.</span></em></strong>

Impact of relative compensation to executive directors with marketing experience on marketing performance: toward an integrative framework

PurposeThis paper aims to combine the agency theory and efficiency wage theory to explore the effects of relative compensation for executive directors with marketing experience on two marketing outcomes (marketing efficiency and market share) and the moderating roles of ownership type (private vs state-owned enterprises) and market concentration in this process.Design/methodology/approachA total of 2,753 firm-year observations from Chinese listed companies (from 2010 to 2014) were retrieved from China Stock Market and Accounting Research database and analyzed using firm random-effects with industry, year and region fixed effects.FindingsRelative compensation has a positive effect on both marketing efficiency and market share, and these effects are moderated by ownership type and market concentration. Specifically, the positive effect of relative compensation on marketing efficiency and market share are stronger for central state-owned enterprises (SOEs) compared to local SOEs and private-owned enterprises but the results are mixed for market concentration.Research limitations/implicationsThis study shows that paying higher compensation to the executive directors with marketing experience can enhance marketing performance, but the data does not allow identification of the actual actions taken by these directors for this.Practical implicationsThis study highlights the importance of appropriate compensation for directors with marketing experience to motivate them to make better marketing decisions to overcome the challenges posed by market concentration and agency conflicts.Originality/valueThis paper points out the importance of having directors with marketing experience and paying them suitable compensation to motivate them to be more effective.

Organizational Justice and Teachers’ Turnover Intention in Primary and Secondary Schools: The Importance of Sustainable Salary Management

Primary and middle school teachers are a critical part of China’s foundational education; teacher turnover heavily affects the stable development of foundational education. Aiming at the phenomenon of teacher turnover intention in primary and secondary schools, interviews and questionnaires were used to explore the relationship between teachers’ organizational justice, salary satisfaction, and turnover intention in the management of primary and secondary schools. The research subjects were more than 500 primary and secondary school teachers from Zhejiang and Jiangsu provinces. The data analysis results show that the sense of interactive fairness is the highest, followed by procedural fairness and the lowest sense of distributional fairness, with a certain sense of unfairness among the three dimensions of organizational fairness among primary and secondary school teachers. The average salary satisfaction score is 2.64, which is lower than the midpoint of 3, and there is a certain degree of dissatisfaction. The results of the correlation analysis showed that the pairwise correlations between the variables reached a very significant level. The results of regression analysis showed that organizational justice had the greatest impact on turnover intention, accounting for 20% of the variance. Salary satisfaction plays a partial mediating role between various dimensions of organizational justice and turnover intention, indicating that procedural fairness, interaction fairness, and distributional justice not only have a direct impact on turnover intention, but also indirectly affect turnover intention by affecting salary satisfaction. The results of this study can provide empirical data support for educational administrative departments and school managers in economically developed regions to improve their compensation management level and implement effective and sustainable compensation management policies and programs, as well as provide first-hand information for cross-country comparative studies of teacher compensation management in the field of education administration.

Analysis of COVID-19's impact on Intel, Microsoft, and Amazon's Corporal Governance

Since 2019 the breakout of Covid-19, the pandemic has strongly impacted individuals’ lives and economic activities. Although there was much research on the influence of Covid-19, fewer researchers studied the relationship between the impact of the pandemic and companies’ compensation policies. Therefore, the main goal of this essay is to analyze the influence of Covid- 19 on technology companies’ compensation policies. We chose three technology companies: Intel, Amazon, and Microsoft, and studied their proxy statement to collect the data on their director compensation and executive compensation from 2019 to 2021. After the comparison, we find that, for Intel, director compensation expenditure rises first in 2019 but drops dramatically in the following two years, with the executive compensation expenditure constantly decreasing from 2019 to 2021; for Microsoft, changes in director compensation are subtle during the pandemic and those in executive compensation are in the same direction with Intel; for Amazon, its expenditure on both director compensation and executive compensation drops rises magnificently from 2020 to 2021, showing a completely different trend from other two companies. This result shows that some technology corporates suffer loss from COVID-19, while some do not. The result also suggests that for those who want to serve as directors and executives in tech companies during the pandemic, a compensation policy with a several-year-long vesting period might be more beneficial and risk averse.

The Association Between U.S. Technology Company's Performance and Non-employee Director's Compensation Policy

Directors’ compensation policies are one of the strategies that the firm's management team and shareholders have of great concern over. Some research shows that policies have a specific association with the individual company’s performance. However, this still lacks a unified explanation. Therefore, the research theme of this paper is the relationship between non-employee directors’ compensation policies and the firm’s performance. This study examined the data public by SEC and PayScale and focused on four U.S technology companies: Meta (Facebook), Twitter, Splunk, and Akamai. The study compares the impact of different compensation policies on these four companies operating capacity, revenue capacity, and stock price. After researched the performance of these four technology companies, the result showed that compensation policy for non-employee directors may have a particular impact on a firm's revenue and its stock price, but the study also showed the impact is not significant because the correlation is a failure in some years for these four companies.

Covid-19 and Firms’ Stock Price Growth: The Role of Market Capitalization

ABSTRACT This paper studies the role of capitalization on firms’ stock price growth in response to new cases of Covid-19 infections in the United States. Controlling for firm and time fixed effects, our panel model estimates show that the effect of new cases of Covid-19 infections on firms’ stock price growth is significantly increasing in capitalization: For each one standard deviation increase in capitalization, a one standard deviation increase in new cases of Covid-19 infections increases the weekly growth rate of firms’ stock prices by about 0.7% points. Effects of capitalization on the impact that Covid-19 infections have on firms’ stock price growth are largest in the travel, tourism, and hospitality sector. Smaller but still positive effects of capitalization are present in the pharmaceutical products, high-tech, and banking and finance sectors. The results are robust to controlling firms’ elasticity of demand, productivity, financial constraints, managerial compensations, and aggregate money growth and economic activity.

Analysis of compensation policies for executives and directors of bio-pharmaceutical companies in the context of the global spread of COVID-19

This paper analyzes the AbbVie, Pfizer and Johnson&Johnson biopharmaceutical industry companies in the context of the spread of COVID-19.There have been articles using 3P1M to study compensation patterns in other industries and it is necessary to use 3P1M to analyze compensation policies of biopharmaceutical companies in order to motivate employees or directors as COVID-19 affects people's health around the world. Firstly, this paper using the quantitative analysis method compared the three companies’ differences of executive compensation about 3P1M and summarized the similarities of them. They have similar philosophies of their compensation policies in three aspects. And the executives of these three companies receive retainer but the components of their cash compensation are different. Among 3P1M, the most different part of 3p1M is their compensation incentive policy that related to executives’ performance. Secondly, this part analysis and compared the similarities and differences of the components of director compensation policy by aspects of the retainer that paid to different board members, incentive grants, stock ownership guidelines.

Reward and Compensation Management on Performance of Health Care Workers in India

Reward and compensation management comes under human resource management. It is concerned with implementing and formulating policies and strategies that aspire to reward employees equitably, fairly and regularly in accordance with their performance and value to the company. Thus, the study sought to examine the impact of reward and compensation management on the performance of healthcare workers in India. The study was literature based. The conclusions and inferences were based on previous studies. Based on the reviewed literature, it was found that reward and compensation management have a significant impact on performance. The reward and compensation system highlights a central attribute of the employment relation. The success or failure of the company primarily relies on its workers. The rewards provided to the workers can raise their performance, dedication, and effectiveness. The study concluded that suitable and regular rewards to workers increase their motivation to work harder and boost general performance. Reward and compensation management's effectiveness positively impacts the health care workers' performance in India. In the lack of appropriate reward and compensation, employees tend to show dissatisfaction through poor performance. The study recommended that hospitals establish effective reward and compensation management systems to motivate employees, thus producing excellent results. The workers' reward and compensation should be made equitable. There should be no favor when it comes to rewarding the employee. Salaries and other compensation payments should be reviewed based on market value and other fundamental requirements. Keywords: Reward and compensation management, performance, health care workers, India

위기상황에서의 전략적 인적자원관리가 직무역량과 경영성과에 미치는 영향 : 객실승무원을 중심으로

The purpose of this study is to find out the effect of strategic human resource management of airline cabin crew on job competency and business performance in crisis situations. Due to COVID-19, airlines are experiencing a lot of difficulty, and their employees are also suffering. It is also difficult for many airlines to manage their human resources. They took a leave of absence or job relocation for human resource management. It can be said that it is important to prevent the turnover of good talent and to manage the competencies of employees. This study was targeted at airline cabin crew and 275 were surveyed. The validity of the study was secured through confirmatory factor analysis, and the hypothesis was tested with structural equation modeling. As a result of the empirical study, it was found that education and training and compensation management had an effect on job competency. However, career management did not affect job competency. Job competency was found to affect business performance. As a result of the empirical study, it was found that the strategic human resource management of cabin crew affects the non-financial management performance of airlines. As a result, the purpose of this study is to help airlines' strategic human resource management and suggested that the job training of cabin crew focused on safety and hospitality should be further subdivided and that a program for career management is needed. And it was suggested that a study on the strategic human resource management of cabin crew is necessary.

A Study on Evaluation of Effectiveness of e-HRM Practices in the Manufacturing Industry

Humans are the most important valuable resource to run a company towards its objectives. Among other resources, Human resources play a vital role in taking part in the maximum contribution to organizational performance. Every organization will have a goal to achieve and the most common goal is to earn profit and added to that to capture the market area for a long time and continuous expansion. To achieve these goals and objectives, organizations have to bring various resources like Money, Power, Raw materials, Humans, etc., All these resources will take part in the organization's performance and its effectiveness completely depends upon “how we are managing those resources?”. Management is all about getting optimized output with minimal input. How we are handling the cash? how we are handling the raw materials? will reflect in the organization's performance. Similarly, human resource has to be managed properly. In the early days, there is no representative for workers to care for them and communicate their needs to the management. The evolution of Human Resource practices like recruitment, training, and development, performance management, compensation management, etc., made some valuable measures in managing employees. As technology grows every day many transformations have occurred in various sectors and domains. In Human Resources, clerical HR practices were now replaced by the internet and it is called e-HRM practices. Manufacturing Industries are slowly transforming into e-HRM Practices and this paper focuses on evaluating its effectiveness. A questionnaire was prepared and distributed to 496 manufacturing companies in Tamil Nadu. This research found that factors measuring the effectiveness of e-HRM practices were correlated and shows its effectiveness is high. e-HRM practices create various advantages like less time-consuming, more accuracy, etc.

The relations of corporate risk, operating efficiency, and firm size to managerial compensation: Evidence from Taiwan stock market-listed companies

This study uses Taiwan stock market-listed company data to analyze relationships between managerial compensation, corporate risk, and operating efficiency. This study focuses on three aspects. First, we examined how different types of corporate risk can relate differently to top manager salaries. Second, we investigated whether management efficiency is associated with managerial compensation in Taiwan. Last, we explored how firm size moderates the relationships between top-manager salaries, corporate risk, and operating efficiency. Our findings reveal that credit risk is remarkably different from other risks related to managerial compensation. Moreover, the moderating effect of firm size varies across various factors. Furthermore, most estimated results supported all our hypotheses. We provided subsequent explanations for the outcomes. The particular phenomenon found in this study also gave implications for the contract design of managerial compensation.

The Association between Outside Directors’ Compensation and ESG Performance: Evidence from Korean Firms

Environmental, social, and corporate governance (ESG) has become essential for corporate sustainability. Among ESG activities, we focus on governance structure since firms can properly engage in activities related to environmental and social responsibility only when their corporate governance structures are well established. Outside directors play an important role in governance structure since they monitor the management and provide expertise to the board of directors. In this study, we pay particular attention to the compensation of outside directors, which reflects the effort, expertise, and independence of outside directors. Based on data from listed firms on the Korea Stock Exchange in South Korea between 2014 and 2020, we examine the association between outside directors’ compensation and ESG performance in certain firms with unique governance structures, namely, chaebols (or family firms). We find that the compensation of outside directors is positively associated with ESG performance, implying that outside directors’ compensation motivates effective monitoring and advisement of management and has an incremental effect on ESG performance. We suggest that the compensation of outside directors is one of the key factors that can significantly affect ESG performance. Therefore, investors and policymakers may evaluate whether a firm is doing well in terms of ESG activities by examining the compensation of outside directors.

Excessive Defense of Antitakeover Provisions and Enterprise Value Based on PSM-DID Quasi-Natural Experimental Method

Under the background of frequent hostile takeover events in China and the autonomy of the articles of association, the articles of association of listed companies even set up antitakeover provisions with an excessive defense that unreasonably restricts the rights of shareholders. Based on the role orientation of innovative supervision, the Small and Medium-sized Investors Service Center (hereinafter referred to as “Investment and Service Center”) proposes to modify the relevant noncompliance provisions in the form of a shareholder recommendation letter. As the basic requirements of the articles of association and the relevant laws in corporate governance are increasingly inconsistent, the legal review of the articles of association is particularly important. This article determines the identification standard of excessive defense of antitakeover provisions by manually collecting the shareholder suggestion letter of the investment service center, the announcement on amendment of association articles of listed companies, and relevant laws and regulations. On this basis, the PSM-DID quasi-natural experimental method is used to empirically test the impact of excessive defense of antitakeover provisions on enterprise value. The study finds that the excessive defense of antitakeover provisions significantly inhibited the enterprise value. In this article, taking a-share listed companies in Shanghai and Shenzhen stock markets in 2007–2018 as an example, with the construction of antiacquisition clause excessive defense index (ATP end), relying on the “quasi-natural experiment” method of PSM-DID, we discuss the impact of excessive defense antiacquisition clause on the value of the enterprise and its impact path analysis. Further study found that its restriction mechanism was reflected in the significant increase of the first type of agency cost and the second type of agency cost. At the same time, the correlation between management compensation and performance and the correlation between management and professional performance are further reduced. Excessive defense against antiacquisition terms can reduce the corporate value, and the impact path of this effect is achieved by increasing type 1 agent costs and type 2 agent costs. It shows that the controlling shareholders are more likely to collude with the management, which aggravates the agency problem. The research conclusion of this article provides legal and economic empirical evidence for listed companies to reasonably set up antitakeover provisions and is also of great significance to innovative regulatory methods such as investment service centers. Excessive defense against antitakeover terms will enhance the dual-ditch effect and ultimately damage corporate value.

DOES INDEPENDENT DIRECTOR’S CASH COMPENSATION MATTER? EVIDENCE FROM CORPORATE FRAUD

This study empirically investigates the relationship between independent directors’ cash compensation and the likelihood of corporate fraud. Using data of 2542 Chinese firms and 17239 firm years from 2010 to 2017, the findings of logistic regression, firm-fixed effects, instrumental variable specification, and propensity score matching models show that there is a negative association between cash compensation of independent directors and corporate fraud. Our findings suggest that if independent directors are treated with higher cash compensation, it enhances the board’s independence and makes the effective monitoring over management behaviors and financial reporting process. On contrary to non-SOEs, the findings also document that the negative association between independent directors’ compensation and corporate fraud is pronounced in SOEs. The study not only shows the impact of independent director’s compensation on firm fraud beyond agency and contract theories but also creates policy implications regarding independent director’s compensation in particular scenario of emerging economies.

Should managers be incentivized with stock or options? Evidence from China

Which type of managerial compensation—stock or options—is more effective as an incentive to maximize shareholder value and curb excessive risk-taking has been debated often in the literature. By investigating the stock and option grants by Chinese firms from 2005 to 2015, we find that higher past stock return volatility increases the preference for stock over options, while a significant upward trend in stock price results in a tendency to choose options over stock. Both stock and option grants as forms of managerial compensation lead to better financial performance, with no significant difference. We present evidence to exclude earnings management as the source of improvement in financial performance. Firms using stock as compensation exhibit higher productivity than those using options. In contrast, there is no improvement in managerial ability from using either stock or options as compensation. Our study deepens the understanding of the relationship between the composition of managerial compensation and firm performance.

Menalar Indikator yang Berkorelasi Terhadap Penerapan Tax Haven

This study uses the variables of transfer pricing, intangible assets, management compensation, and multinational companies to focus on the factors that influence the use of tax havens. This study aims to determine the determinants of the use of related companies in tax havens, specifically this study uses secondary data, namely the annual reports of all non-financial companies listed on the Indonesia Stock Exchange and subsidiaries listed in tax havens. 2017. This is a quantitative study using multiple regression analysis. The results of this study indicate that active transfer pricing activities and management compensation have a positive impact on the utilization of related companies in tax havens. The high activity of intangible assets and multinational companies does not have a significant impact on the utilization of related companies in the tax haven. The results of this study are to determine the indicators of the use of companies associated with taxpayers. Based on the results of the delay test, it is concluded that the operation of violent price transfers and management compensation has a positive effect on the use of affiliated companies in tax havens. The high performance of intangible assets and international companies has no significant impact on the use of affiliated companies in tax havens. The results of this study indicate the effect of transfer prices and management on the use of affiliated companies in tax havens. The results of this study can create a map of the company's behavior identified in the tax relationship

A Quantitative Model of Dynamic Moral Hazard

Abstract We develop an equilibrium model with moral hazard, which arises because some productivity shocks are privately observed by firm managers only. We characterize the optimal contract and its implications for firm size, growth, and managerial pay-performance sensitivity and exploit them to quantify the severity of the moral hazard problem. Our estimation suggests that unobservable shocks are relatively modest and account for about 10$\%$ of the total variation of firm output. Nonetheless, moral-hazard-induced incentive pay is quantitatively significant and accounts for 50$\%$ of managerial compensation. Eliminating moral hazard would result in about a 1$\%$ increase in aggregate output.

Managing sustainability—Does the integration of environmental, social and governance key performance indicators in the internal management systems contribute to companies' environmental, social and governance performance?

AbstractAssessing whether a company is sustainable or not is challenging for investors. For this reason, it is particularly important how companies integrate and manage sustainability. This paper primarily aims to investigate the effects of implementing environmental, social and governance (ESG) key performance indicators (KPIs) in the internal management system (IMS) on ESG performance. Further, the effect of a consistent use of ESG KPIs in the IMS and the management compensation scheme (MCS) on ESG performance is examined. Using hand‐collected data of the largest German‐listed companies, this study employs t tests for differences in means and ordinary least square (OLS) regressions to study these associations. The results indicate that the implementation of ESG KPIs in the IMS increases ESG performance. In addition, the performance for environmental and social sub‐dimensions is enhanced. No significant influence of a consistent use of ESG KPIs in the IMS and the MCS on ESG performance is observed. The results highlight that implementing ESG KPIs in the IMS is a practical approach to manage sustainability and to increase ESG performance. Our findings have practical and theoretical implications for researchers, regulators and companies considering the integration of sustainability and further communicating transparently and strengthening investor trust.

PENGARUH PAJAK TANGGUHAN, KOMPENSASI MANAJEMEN DAN INTENSITAS PERSEDIAAN TERHADAP MANAJEMEN PAJAK

The purpose of this research are to test the influence of Deferred Tax, Management Compensation and Inventory Intensity against Tax Management. The independent variables are used Deferred Tax, Management Compensation and Inventory Intensity. The dependent variable are used Tax Management. The study used quantitative method with secondary data. The population of this research are manufacturing company of consumer goods industry sector in Indonesia Stock Exchange 2016 - 2021. For the interpretation sample used purposive sampling method because this research have specific sample criteria agree with the purpose of this research. The study used 72 sample for manufacturing company based on purposive sampling method. The hypothesis used testing multiple regression analysis method with Eviews 12 version. The results on the F test can be known variable Deferred Tax, Management Compensation and Inventory Intensity have effect to Tax Management. The result on the T test can be known variable Deferred Tax have effect to Tax Management. The Management Compensation variable have effect to Tax Management. The Inventory Intensity have effect to Tax Management

PENGARUH CORPORATE GOVERNANCE DAN KOMPENSASI MANAJEMEN TERHADAP MANAJEMEN PAJAK

This study aims to determine the influence of corporate governance and management compensation on tax management. Tax management is a dependent variable and corporate governance and management compensation is an independent variable. This type of research is quantitative, with a population of 77 companies this research was conducted on property and real estate sector manufacturing companies listed on the IDX in 2016-2020, a research sample of 8 companies with 5 years of observation, the sample determination method used was purposive sampling. The analysis method uses multiple regression analysis, T test and F test using Eviews 9. The results showed that corporate governance affects tax management and management compensation affects tax management. Meanwhile, corporate governance and compensation management have a simultaneous effect on tax management