Title: CEO pay, firm performance, and corporate governance in India's listed firms

Authors: Manju Jaiswall, Michael Firth

Addresses: Department of Finance and Control, Indian Institute of Management Calcutta, Kolkata, 700104, India. ' Department of Finance and Insurance, Lingnan University, Tuen Mun, NT, Hong Kong

Abstract: In this study we examine the determinants of CEO compensation in large listed Indian companies. There is a positive relation between pay and a firm|s performance. We find that remuneration committees are related to higher CEO compensation and there is no association between remuneration committees and pay-performance sensitivities. Thus, remuneration committees do not act in the way predicted by governance guidelines. CEOs in family firms are paid more. This suggests that CEOs use their power as a member of the controlling family to obtain higher compensation. The minority shareholders are therefore disadvantaged. CEOs in risky firms are paid less.

Keywords: top management pay; financial performance; corporate governance; remuneration committee; family business; CEO pay; CEO compensation; India; firm performance.

DOI: 10.1504/IJCG.2009.029367

International Journal of Corporate Governance, 2009 Vol.1 No.3, pp.227 - 240

Published online: 28 Nov 2009 *

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