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建立人际资源圈澳洲论文代写：CEO compensation and firm performance
2017-05-03 来源: 51due教员组 类别: 更多范文
本篇澳洲论文代写讲了薪酬是代理理论背景下大量学术研究者的热点话题之一。代理理论中有两个相互矛盾的观点－最优契约理论和管理层权力观。因此，本文主要目的是研究通过整体金融产业绩效中CEO报酬与公司之间的联系。然后，测试是否有一些因素对补偿的影响。本篇澳洲论文代写由51due论文代写机构整理，供大家参考阅读。
薪酬与企业绩效指标的信息可从2004到2009期间执行比较Compustat的数据库。在这篇文章中，OLS回归测试的实施将证明之间的联系的薪酬与公司绩效和薪酬等因素之间的关系。现金/总薪酬与公司绩效的结果显示正向关系是非常显著的。我发现公司规模和CEO薪酬杠杆起着决定性因素。
CEO compensation is one of the hot topics for a large number of academic researchers under the context of agency theory. Agency theory has two contradictory views－optimal contract view and managerial power view. Therefore, the paper mainly aims toexaminethe links between CEO compensation and firm performance through the overall non-financial industry. Then, testing whether some factors have an impact on compensation. The information of compensation and firm performance indicator isavailable on Execucomp and Compustat database from the period 2004 to 2009.In this essay, an OLS regression test will be implemented to prove the links between compensation and firm performance and that between compensation and other determinants. My results show a significantly positive relationshipon both cash/total compensation and firm performance.I find Firm size and leverage are key determinants of CEO compensation.
The relationship between CEO compensation and firm performance has always been a hot topic in academic literatures based on the problem of agency theory. The problem of agency, also called agency cost, arises from the separation of the ownership (principal) from management control (agent)(Berle and Means, 1932). Jensen and Meckling (1976) suggest principals (shareholders) may not have knowledge to manage firms, and hence, they will employ another person (agent) to perform on their behalf. However, agents (managers) are likely to perform in their own interest to pursue their goals since principals and mangers have different maximum utility; for instance, managers prefer perusing the expansion of firm size, but shareholders prefer the growth of stock price. Thus,in order to keep their goal of consistency, principals appoint aboard of directors to monitor the managers’ behaviour. Fama and Jensen (1983) put emphasis that the most important function of the board of director is to mitigate agency cost by reducing the conflict of interest between shareholders and managers. Managers are likely to be risk-averse, but shareholders prefer relatively high risk, but positive NPV project; hence, the alignment of interest between two parties plays a key role in improving performance. As a result, the board of directors will design an optimal contract to align the interest between both of them.
Summary and conclusion
This study contributes to the literature and theory on CEO pay by analysing data from non-financial industry. My main purpose is to examine whether the cash and total compensation related to firm performance.
I observe the literatures; agency theory and empirical studies do provide much help in examining and explaining the pay-performance relationships. On the one hand, agency theory assumes compensation be the main mechanism to help the alignment of the interest between shareholders and managers. On the other hand, managerial power theory suggests CEO pay, can gain from CEOs’ own power and thus irrelevant to performance.
I analyse the cash compensation and total compensation of CEO from a large sample of firms in non-financial industry over the period 2004-2009. I find statistic evidence that both cash and total compensation are positively associated with firm performance through the regression analysis. Since a concern exists on which performance measure is proper, thus I apply three measures－ two accounting-based measures (ROA, ROE) and one market-based measure(ret). Furthermore, I apply several determinants into regression to analyses which factors play an important role in the determination of compensation, such as size, investment opportunity, leverage, age, tenure. I conclude leverage and firm size always determine the compensation over all the period. In order to test the robustness of the result, I implement an elasticity analysis, which prove a consistent result. Therefore, the finding is consistent with optimal contract view on agency theory, which implies, high performance gain high pay.
Some limitations of this study deserved to note so that these issues can be addressed in future research. For instance, the time interval is too short, only six years; this may not be adequate representation of the reality. One-year lag performance is not adequate to explain total compensation effect. Some corporate governance factors should contain in the regression model as control variable, it is interesting to see if the addition in this variable would, especially less-effective governance environment, can change my result.
From the small sample analysis, the relationship between the CEO compensation and the corporation performance is confirmed from the financial companies. And the relationship is not a fixed one but with a period varieties character. However, the description analysis and the non-parameter method are carried out in this part and the two methods isn’t a stable one but the effect to compare the companies in CEO compensation efficiency.
Finally, subsequent firm performance should contain in the discussion of pay-performance relationships.
Reference
Barber, W.R., Janakiraman, S.N.,& Kang, SH. 1996. Investment opportunities and the structure of Executive compensation. Journal of Accounting and Economics. 21: pp.297-318.
Baker, Malcolm. &Gomper, Paul.A.2003. The determinants of board structure at the initial public offering. Journal of Law and Economics 46: pp.569-598
Baysinger, B.D.&Hoskisson, R.E.1990. The composition of the board of directors and strategic control: effects of corporate strategy. Academy of Management Review 15: pp.72-87.
Bebchuk, L. &Grinstein,Y. 2005.Firm Expansion and CEO pay. NBER Working Paper No.11886.
Belliveau, M.A., O’Reilly,C.A. & Wade, J.B.1996. Social Capital at the top: Effects of Social Similarity and Status on CEO Compensation. The Academy of Management Journal 39(6): pp.1568-1593.
Berle, A. & Means, G.1932.The Modern Corporation and Private Property. NewYork: Harcourt, Brace and World.
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