Determinants and consequences of large CEO pay Online publication date: Tue, 09-Sep-2008
by Kiridaran Kanagaretnam, Gerald J. Lobo, Emad Mohammad
International Journal of Accounting and Finance (IJAF), Vol. 1, No. 1, 2008
Abstract: We investigate the association between large CEO pay and the underlying economic determinants of pay, governance variables, variables capturing director pay, and other potential variables that may explain large CEO payouts. We also examine whether firms with large CEO pay have better future performance and use more financial reporting discretion than other firms. Our study is motivated by the large payouts to CEOs over the last decade that continue to attract considerable attention from institutional investors, regulators and the popular press. Our results indicate that whether a firm has large CEO pay is only weakly related to the underlying economic determinants but strongly related to components of outside director remuneration, the dual role of CEO and board chair, asset change, whether the firm has a new CEO, and CEO equity ownership. Additionally, we find that large CEO pay firms engage in higher levels of financial reporting discretion and have weaker future performance.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Accounting and Finance (IJAF):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook