A path analysis investigation of the relationships between CEO pay ratios and firm performance mediated by employee satisfaction
Author
Abstract
Suggested Citation
DOI: 10.1016/j.adiac.2020.100457
Download full text from publisher
As the access to this document is restricted, you may want to search for a different version of it.
References listed on IDEAS
- James B. Wade & Charles A. O'Reilly & Timothy G. Pollock, 2006. "Overpaid CEOs and Underpaid Managers: Fairness and Executive Compensation," Organization Science, INFORMS, vol. 17(5), pages 527-544, October.
- Smith, Clifford Jr. & Watts, Ross L., 1992.
"The investment opportunity set and corporate financing, dividend, and compensation policies,"
Journal of Financial Economics, Elsevier, vol. 32(3), pages 263-292, December.
- Smith, C.W. & Watts, R.L., 1992. "The Investment Oppotunity set and Corporate Financing, Dividend and Compensation Policies," Papers 92-02, Rochester, Business - Financial Research and Policy Studies.
- Pevzner, Mikhail & Xie, Fei & Xin, Xiangang, 2015. "When firms talk, do investors listen? The role of trust in stock market reactions to corporate earnings announcements," Journal of Financial Economics, Elsevier, vol. 117(1), pages 190-223.
- Berger, Philip G & Ofek, Eli & Yermack, David L, 1997.
"Managerial Entrenchment and Capital Structure Decisions,"
Journal of Finance, American Finance Association, vol. 52(4), pages 1411-1438, September.
- Philip E. Berger & Eli Ofek & David Yermack, 1996. "Managerial Entrenchment and Capital Structure Decisions," New York University, Leonard N. Stern School Finance Department Working Paper Seires 96-14, New York University, Leonard N. Stern School of Business-.
- Phillip Toner, 2011. "Workforce Skills and Innovation: An Overview of Major Themes in the Literature," OECD Education Working Papers 55, OECD Publishing.
- Paul Gompers & Joy Ishii & Andrew Metrick, 2003.
"Corporate Governance and Equity Prices,"
The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 107-156.
- Paul A. Gompers & Joy L. Ishii & Andrew Metrick, 2001. "Corporate Governance and Equity Prices," NBER Working Papers 8449, National Bureau of Economic Research, Inc.
- Paul A. Gompers & Joy L. Ishii & Andrew Metrick, 2002. "Corporate Governance and Equity Prices," Center for Financial Institutions Working Papers 02-32, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Bebchuk, Lucian A. & Cremers, K.J. Martijn & Peyer, Urs C., 2011. "The CEO pay slice," Journal of Financial Economics, Elsevier, vol. 102(1), pages 199-221, October.
- Edward P. Lazear, 2000.
"Performance Pay and Productivity,"
American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
- Edward P. Lazear, 1996. "Performance Pay and Productivity," NBER Working Papers 5672, National Bureau of Economic Research, Inc.
- Yermack, David, 1996. "Higher market valuation of companies with a small board of directors," Journal of Financial Economics, Elsevier, vol. 40(2), pages 185-211, February.
- Edmans, Alex, 2011. "Does the stock market fully value intangibles? Employee satisfaction and equity prices," Journal of Financial Economics, Elsevier, vol. 101(3), pages 621-640, September.
- Core, John E. & Holthausen, Robert W. & Larcker, David F., 1999. "Corporate governance, chief executive officer compensation, and firm performance," Journal of Financial Economics, Elsevier, vol. 51(3), pages 371-406, March.
- Josh Bivens & Lawrence Mishel, 2013. "The Pay of Corporate Executives and Financial Professionals as Evidence of Rents in Top 1 Percent Incomes," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 57-78, Summer.
- Phyllis A. Siegel & Donald C. Hambrick, 2005. "Pay Disparities Within Top Management Groups: Evidence of Harmful Effects on Performance of High-Technology Firms," Organization Science, INFORMS, vol. 16(3), pages 259-274, June.
- Akerlof, George A & Yellen, Janet L, 1988. "Fairness and Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 44-49, May.
- Yermack, David, 1995. "Do corporations award CEO stock options effectively?," Journal of Financial Economics, Elsevier, vol. 39(2-3), pages 237-269.
- Adams, Renée B. & Ferreira, Daniel, 2009.
"Women in the boardroom and their impact on governance and performance,"
Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
- Adams, Renée B. & Ferreira, Daniel, 2008. "Women in the Boardroom and Their Impact on Governance and Performance," CEI Working Paper Series 2008-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
- Levine, David I., 1991.
"Cohesiveness, productivity, and wage dispersion,"
Journal of Economic Behavior & Organization, Elsevier, vol. 15(2), pages 237-255, March.
- Levine, David, 1989. "Cohesiveness, Productivity, and Wage Dispersion," Institute for Research on Labor and Employment, Working Paper Series qt8kd4d0p4, Institute of Industrial Relations, UC Berkeley.
- Peter Demerjian & Baruch Lev & Sarah McVay, 2012. "Quantifying Managerial Ability: A New Measure and Validity Tests," Management Science, INFORMS, vol. 58(7), pages 1229-1248, July.
- Lucian Bebchuk & Alma Cohen & Allen Ferrell, 2009. "What Matters in Corporate Governance?," The Review of Financial Studies, Society for Financial Studies, vol. 22(2), pages 783-827, February.
- Core, John & Guay, Wayne, 1999. "The use of equity grants to manage optimal equity incentive levels," Journal of Accounting and Economics, Elsevier, vol. 28(2), pages 151-184, December.
- Phillip Toner, 2011. "Workforce Skills and Innovation: An Overview of Major Themes in the Literature," OECD Science, Technology and Industry Working Papers 2011/1, OECD Publishing.
- Lan Guo & Theresa Libby & Xiaotao (Kelvin) Liu, 2017. "The Effects of Vertical Pay Dispersion: Experimental Evidence in a Budget Setting," Contemporary Accounting Research, John Wiley & Sons, vol. 34(1), pages 555-576, March.
- Ortiz-Molina, Hernan, 2007. "Executive compensation and capital structure: The effects of convertible debt and straight debt on CEO pay," Journal of Accounting and Economics, Elsevier, vol. 43(1), pages 69-93, March.
- Faleye, Olubunmi & Reis, Ebru & Venkateswaran, Anand, 2013. "The determinants and effects of CEO–employee pay ratios," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 3258-3272.
- Murphy, Kevin J., 1999. "Executive compensation," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 38, pages 2485-2563, Elsevier.
- repec:eee:labchp:v:3:y:1999:i:pb:p:2485-2563 is not listed on IDEAS
- Daniel H. Simon & Jed DeVaro, 2006. "Do the best companies to work for provide better customer satisfaction?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(8), pages 667-683.
- Caterina Tantalo & Richard L. Priem, 2016. "Value creation through stakeholder synergy," Strategic Management Journal, Wiley Blackwell, vol. 37(2), pages 314-329, February.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
Cited by:
- Essam Joura & Qin Xiao & Subhan Ullah, 2023. "The moderating effects of CEO power and personal traits on say‐on‐pay effectiveness: Insights from the Anglo‐Saxon economies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 4055-4078, October.
- Li, John, 2022. "The effect of employee satisfaction on effective corporate tax planning: Evidence from Glassdoor," Advances in accounting, Elsevier, vol. 57(C).
- Ye, Miaomiao & Li, Mengzhe & Zeng, Qiannan, 2022. "Former CEO director and executive-employee pay gap," Pacific-Basin Finance Journal, Elsevier, vol. 76(C).
- Clement Olalekan Olaniyi & Olaolu Richard Olayeni, 2020. "A new perspective into the relationship between CEO pay and firm performance: evidence from Nigeria’s listed firms," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 22(2), pages 250-277, December.
- Li, Rui & Xu, Shoufu & Zhang, Yun, 2023. "Can digital transformation reduce within-firm pay inequality? Evidence from China," Economic Modelling, Elsevier, vol. 129(C).
- Lim, Raymond, 2020. "Moderating Effect and Mediating Effect Toward Firm Performance Varying Across Different Organizational Orientations," OSF Preprints mjbzs, Center for Open Science.
- Denise Rousseau & Byeong Jo Kim & Ryan Splenda & Sarah Young & Jangbum Lee & Donna Beck, 2023. "Does chief executive compensation predict financial performance or inaccurate financial reporting in listed companies: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 19(4), December.
- Winatha, Arvin, 2020. "Pendekatan dalam Pengukuran Firm Performance," OSF Preprints 7c3dz, Center for Open Science.
- Byrka-Kita Katarzyna & Bulasiński Karol, 2024. "CEO pay ratio versus financial performance in Polish public companies," Economics and Business Review, Sciendo, vol. 10(3), pages 197-215.
- Ali Besharat & Kimberly A. Whitler & Saim Kashmiri, 2024. "When CEO Pay Becomes a Brand Problem," Journal of Business Ethics, Springer, vol. 190(4), pages 941-973, April.
Most related items
These are the items that most often cite the same works as this one and are cited by the same works as this one.- Neyland, Jordan, 2020. "Love or money: The effect of CEO divorce on firm risk and compensation," Journal of Corporate Finance, Elsevier, vol. 60(C).
- Albuquerque, Ana M. & De Franco, Gus & Verdi, Rodrigo S., 2013. "Peer choice in CEO compensation," Journal of Financial Economics, Elsevier, vol. 108(1), pages 160-181.
- Ethan Rouen, 2017. "Rethinking Measurement of Pay Disparity and its Relation to Firm Performance," Harvard Business School Working Papers 18-007, Harvard Business School.
- James, Hui & Benson, Bradley W. & Wu, Chen (Ken), 2017. "Does CEO ownership affect payout policy? Evidence from using CEO scaled wealth-performance sensitivity," The Quarterly Review of Economics and Finance, Elsevier, vol. 65(C), pages 328-345.
- Hanlon, Michelle & Rajgopal, Shivaram & Shevlin, Terry, 2003. "Are executive stock options associated with future earnings?," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 3-43, December.
- Rüdiger Fahlenbrach, 2009.
"Shareholder Rights, Boards, and CEO Compensation,"
Review of Finance, European Finance Association, vol. 13(1), pages 81-113.
- Fahlenbrach, Rudiger, 2008. "Shareholder Rights, Boards, and CEO Compensation," Working Paper Series 2008-5, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
- Anup Agrawal & Tareque Nasser, 2019. "Blockholders on Boards and CEO Compensation, Turnover and Firm Valuation," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 9(03), pages 1-67, September.
- Focke, Florens & Maug, Ernst & Niessen-Ruenzi, Alexandra, 2017. "The impact of firm prestige on executive compensation," Journal of Financial Economics, Elsevier, vol. 123(2), pages 313-336.
- Choe, Chongwoo & Tian, Gloria Y. & Yin, Xiangkang, 2014. "CEO power and the structure of CEO pay," International Review of Financial Analysis, Elsevier, vol. 35(C), pages 237-248.
- Hwang, Byoung-Hyoun & Kim, Seoyoung, 2009. "It pays to have friends," Journal of Financial Economics, Elsevier, vol. 93(1), pages 138-158, July.
- Hillegeist, Stephen A. & Peñalva, Fernando, 2004. "Stock option incentives and firm performance," IESE Research Papers D/535, IESE Business School.
- Vo, Thi Thanh Nha & Canil, Jean Milva, 2019. "CEO pay disparity: Efficient contracting or managerial power?," Journal of Corporate Finance, Elsevier, vol. 54(C), pages 168-190.
- Vafeas, Nikos & Vlittis, Adamos, 2019. "Board executive committees, board decisions, and firm value," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 43-63.
- Baranchuk, Nina & Chib, Siddhartha, 2008. "Assessing the role of option grants to CEOs: How important is heterogeneity?," Journal of Empirical Finance, Elsevier, vol. 15(2), pages 145-166, March.
- Hill, Mary S. & Lopez, Thomas J. & Reitenga, Austin L., 2016. "CEO excess compensation: The impact of firm size and managerial power," Advances in accounting, Elsevier, vol. 33(C), pages 35-46.
- Matolcsy, Zoltan & Shan, Yaowen & Seethamraju, Vinay, 2012. "The timing of changes in CEO compensation from cash bonus to equity-based compensation: Determinants and performance consequences," Journal of Contemporary Accounting and Economics, Elsevier, vol. 8(2), pages 78-91.
- Chongwoo Choe & Gloria Tian & Xiangkang Yin, 2008.
"Managerial Power, Stock-Based Compensation, And Firm Performance: Theory And Evidence,"
Monash Economics Working Papers
21/08, Monash University, Department of Economics.
- Choe, Chongwoo & Tian, Gloria & Yin, Xiangkang, 2009. "Managerial Power, Stock-Based Compensation, and Firm Performance: Theory and Evidence," MPRA Paper 13449, University Library of Munich, Germany.
- Frye, Melissa B. & Pham, Duong T., 2018. "CEO gender and corporate board structures," The Quarterly Review of Economics and Finance, Elsevier, vol. 69(C), pages 110-124.
- David Hillier & Patrick McColgan & Athanasios Tsekeris, 2022. "How did the Sarbanes–Oxley Act affect managerial incentives? Evidence from corporate acquisitions," Review of Quantitative Finance and Accounting, Springer, vol. 58(4), pages 1395-1450, May.
- Cline, Brandon N. & Yore, Adam S., 2016. "Silverback CEOs: Age, experience, and firm value," Journal of Empirical Finance, Elsevier, vol. 35(C), pages 169-188.
More about this item
Keywords
Fairness of CEO pay dispersions; Employee satisfaction; Firm performance;All these keywords.
Statistics
Access and download statisticsCorrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:advacc:v:48:y:2020:i:c:s0882611020300274. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/advances-in-accounting/ .
Please note that corrections may take a couple of weeks to filter through the various RePEc services.