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Journal articles on the topic 'Pay-performance sensitivity'

Author: Grafiati

Published: 4 June 2021

Last updated: 10 March 2023

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1

Brick, Ivan E., Oded Palmon, and John K. Wald. "Too Much Pay-Performance Sensitivity?" Review of Economics and Statistics 94, no. 1 (February 2012): 287–303. http://dx.doi.org/10.1162/rest_a_00142.

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2

Tinaikar, Surjit, and Kun Yu. "Pay performance sensitivity and earnings restatements." Corporate Ownership and Control 11, no. 3 (2014): 273–93. http://dx.doi.org/10.22495/cocv11i3c2p5.

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We examine whether the board of directors adjusts the sensitivity of CEO compensation to earnings following an earnings restatement. Using a sample of 598 restating firms and 2,065 non-restating firms during the period of 1995-2011, we find that firms decrease the sensitivity of cash compensation to accounting earnings after restatements and that this decrease is more pronounced for firms that appoint new CEOs after restatements than those whose CEOs continue to remain in office after restatements. Furthermore, the results suggest that the decrease in the sensitivity of cash compensation to earnings for restating firms with new CEOs is more pronounced for firms with a higher level of institutional ownership. This highlights the monitoring role of institutional investors in the redesign of compensation contracts following restatements. Overall, our results are consistent with the argument that the board adjusts the sensitivity of cash compensation to earnings downwards following restatements to constrain earnings management and recover public confidence in the firm.

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3

Dai, Zhonglan, Li Jin, and Weining Zhang. "Executive Pay-Performance Sensitivity and Litigation." Contemporary Accounting Research 31, no. 1 (October 7, 2013): 152–77. http://dx.doi.org/10.1111/1911-3846.12019.

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4

Chou, Pei-I., and Chia-Hao Lee. "Pay-risk Sensitivity and Bank Performance." Advances in Economics and Business 4, no. 7 (July 2016): 366–73. http://dx.doi.org/10.13189/aeb.2016.040706.

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5

Zábojník, Ján. "Pay-performance sensitivity and production uncertainty." Economics Letters 53, no. 3 (December 1996): 291–96. http://dx.doi.org/10.1016/s0165-1765(96)00938-x.

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6

Cho, MyoJung, and Salma Ibrahim. "Non-financial performance measures and pay-performance sensitivity." Journal of Financial Reporting and Accounting 20, no. 2 (October 11, 2021): 185–214. http://dx.doi.org/10.1108/jfra-01-2021-0018.

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Purpose This study aims to examine whether chief executive officer (CEO) pay-performance sensitivity to shareholder wealth is related to the use of non-financial performance measures in incentive contracts. Design/methodology/approach Using hand-collected performance measure data in a sample of S&P 500 firms across the period 1994–2010, this study investigates the sensitivity of CEO bonus and cash pay to shareholder wealth of firms that use non-financial performance (NFPM) measures of varying types and contractual weights in their bonus contracts along with financial measures (NFPM firms) in comparison to that of firms using financial measures only (FPM firms). Findings This study finds evidence that the pay-performance sensitivity is stronger in NFPM firms than in FPM firms. These results are driven by the use of CEO individual goals and operational efficiency. Furthermore, when using environmental, social and governance factors, the pay-performance sensitivity is stronger in terms of accounting performance only. This study also finds that using NFPM enhances pay-performance sensitivity more as their contractual weights increase and as financial risk increases. Practical implications These findings are important to stakeholders, and especially regulators in understanding incentive effects of alternative performance measures. This study also sheds light on what types of non-financial measures are better in helping firms align CEOs’ incentives to shareholders’ interests. Originality/value This study contributes to prior research on benefits of non-financial information within the context of executive compensation. This study presents original results about the effects of contractual weights of non-financial measures and financial risk on CEO pay-performance sensitivity. This study also presents new insights regarding how different types of non-financial measures affect CEO pay-performance sensitivity.

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7

Amzaleg, Yaron, Ofer H. Azar, Uri Ben-Zion, and Ahron Rosenfeld. "CEO control, corporate performance and pay-performance sensitivity." Journal of Economic Behavior & Organization 106 (October 2014): 166–74. http://dx.doi.org/10.1016/j.jebo.2014.07.004.

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8

Chen, Hui, Debra Jeter, and Ya-Wen Yang. "Pay-performance sensitivity before and after SOX." Journal of Accounting and Public Policy 34, no. 1 (January 2015): 52–73. http://dx.doi.org/10.1016/j.jaccpubpol.2014.09.003.

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9

Kim, Soojin, Jongkook Park, and Youngeun Hong. "Why is Executive Compensation not Responsive to Firm Performance? - The Effect of Tax Avoidance on Pay-Performance Sensitivity -." Korean Accounting Review 45, no. 4 (August 31, 2020): 93–129. http://dx.doi.org/10.24056/kar.2020.03.009.

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10

Lee, Min－Young, and Jin－Bae Kim. "K－IFRS Adoption and Managers’ Pay－Performance Sensitivity." Korea Association of Business Education 33, no. 5 (October 30, 2018): 157–80. http://dx.doi.org/10.23839/kabe.2018.33.5.157.

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11

Abraham, Rebecca, Judith Harris, and Joel Auerbach. "CEO Pay-Performance Sensitivity: A Multi-Equation Model." Technology and Investment 05, no. 03 (2014): 125–36. http://dx.doi.org/10.4236/ti.2014.53013.

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12

Chen, Wanlin. "Short Selling and Executive Pay-for-Performance Sensitivity." American Journal of Industrial and Business Management 08, no. 04 (2018): 1007–21. http://dx.doi.org/10.4236/ajibm.2018.84069.

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13

CHOIWONJU. "Compensation Committee Quality and Managers' Pay-Performance Sensitivity." Management & Information Systems Review 35, no. 1 (March 2016): 173–88. http://dx.doi.org/10.29214/damis.2016.35.1.009.

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14

Dutta, Sunil. "Managerial Expertise, Private Information, and Pay-Performance Sensitivity." Management Science 54, no. 3 (March 2008): 429–42. http://dx.doi.org/10.1287/mnsc.1070.0785.

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15

Chen, Hui, and Fei Leng. "Pay-Performance Sensitivity in a Heterogeneous Managerial Labor Market." Journal of Management Accounting Research 16, no. 1 (January 1, 2004): 19–33. http://dx.doi.org/10.2308/jmar.2004.16.1.19.

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The persistently low pay-performance sensitivity between executive compensation and firm performance has puzzled both practitioners and academics. We propose a hybrid model that incorporates both moral hazard and adverse selection problems to explain this puzzle. We argue that the managerial labor market is heterogeneous in nature, not homogeneous as assumed by the pure moral hazard model and empirical work based on this model. We demonstrate that the optimal pay-performance sensitivity derived from the hybrid model is lower than that derived from the pure moral hazard model. Furthermore, we also show that pay-performance sensitivity is a function of the mix of types in the market. The more capable managers there are in the market, the more likely the market's average pay-performance sensitivity is high. We then conduct an empirical test and find evidence that is consistent with the prediction of our model.

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16

Aaen, Thomas, and Rainer Lueg. "Performance pay sensitivity: Do top management incentives align with shareholder value creation?" Corporate Ownership and Control 19, no. 3 (2022): 168–81. http://dx.doi.org/10.22495/cocv19i3art13.

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Arising from the principal-agent consideration, Jensen and Murphy (1990b) studied the pay-performance sensitivity (including pay, options, stockholdings, and dismissal) for chief executive officers (CEOs) in the 1980s. They found that CEO wealth changes $3.25 for every $1,000 change in shareholder wealth. In this study, we revisit the issue of the linkage between CEO pay and performance but with the difference that we only include observable measures in the pay-performance sensitivity estimate. Our data on executive compensation stems from the ExecuComp database on S&P 1500 firms, and the performance data from the Center for Research in Security Prices (CRSP) database (total: 23,737 firm-year observations). We find that CEO wealth changes $5.34 for every $1,000 change in shareholder wealth. Almost all of this sensitivity is attributed to compensation through stock options and the CEO’s inside stockholdings. Today, the incentives generated by stock options have increased thirteen times, and the total pay-performance sensitivity has almost doubled in value, compared to when Jensen and Murphy (1990b) estimated the pay-performance sensitivity in the 1980s for the first time. Despite the increased pay performance sensitivity, we hypothesize that internal and external political forces negatively affect the CEO’s performance incentives. Compensation constraints reduce the pay performance sensitivity and hereby the incentives for the CEO to maximize shareholder wealth. Further research on how CEO wealth varies with absolute and relative corporate performance is required to determine if the CEO’s incentives are consistent with shareholder wealth maximization.

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17

Kim, Taekyu, and Injoong Kim. "CEO Pay-performance Sensitivity in KOSPI and KOSDAQ Firms." Korean Data Analysis Society 22, no. 4 (August 30, 2020): 1291–301. http://dx.doi.org/10.37727/jkdas.2020.22.4.1291.

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18

Kim, Hyunjin, and Wonju Choi. "Managerial Power and Pay-Performance Sensitivity using Individual Compensation." Korean Academic Association of Business Administration 30, no. 2 (February 28, 2017): 203–29. http://dx.doi.org/10.18032/kaaba.2017.30.2.203.

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19

Abraham, Rebecca, Judith Harris, and Joel Auerbach. "Disruptive Technology as Antecedent to CEO Pay-Performance Sensitivity." Technology and Investment 06, no. 02 (2015): 83–92. http://dx.doi.org/10.4236/ti.2015.62009.

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20

Bussin, Mark. "CEO pay-performance sensitivity in the South African context." South African Journal of Economic and Management Sciences 18, no. 2 (May 28, 2015): 232–44. http://dx.doi.org/10.4102/sajems.v18i2.838.

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The topic of executive pay-performance sensitivity has resulted in mixed research findings. Literature related to executive remuneration constructs, company performance measures and the underlying theories is critically reviewed in this article. The literature is compared to research findings within the South African context pre, during and post the Global Financial Crisis of 2008. The researcher found similar results in the South African context compared to research in other countries and industries. The research challenges the notion that there is one dominant theory driving CEO compensation. The principal-agent theory, supported by the optimal contract theory, are foremost during periods of strong economic performance, while the influence of managerial power and other behavioural theories appear to prevail during periods of weak economic performance. This article proposes some critical considerations in order to manage this tension.

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21

Yang, Bei, Charles P. Cullinan, and Hui Liu. "Analyst following and pay-performance sensitivity: evidence from China." Applied Economics 50, no. 37 (February 26, 2018): 4040–53. http://dx.doi.org/10.1080/00036846.2018.1441508.

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22

Zhang, Wei, Steven F. Cahan, and Arthur C. Allen. "Insider Trading and Pay-Performance Sensitivity: An Empirical Analysis." Journal of Business Finance & Accounting 32, no. 9-10 (November 16, 2005): 1887–919. http://dx.doi.org/10.1111/j.0306-686x.2005.00651.x.

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23

李, 艳红. "Political Connections, Institutional Differences and Executives’ Pay-Performance Sensitivity." Advances in Social Sciences 07, no. 07 (2018): 1054–60. http://dx.doi.org/10.12677/ass.2018.77158.

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24

Mishra, Chandra S., and James F. Nielsen. "The association between bank performance, board independence, and CEO pay‐performance sensitivity." Managerial Finance 25, no. 10 (October 1999): 22–33. http://dx.doi.org/10.1108/03074359910766208.

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25

Brandão, Isac de Freitas, Alessandra Carvalho de Vasconcelos, Márcia Martins Mendes De Luca, and Vicente Lima Crisóstomo. "Composition of the board of directors and pay-performance sensitivity." Revista Contabilidade & Finanças 30, no. 79 (March 2019): 28–41. http://dx.doi.org/10.1590/1808-057x201806610.

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ABSTRACT This article investigates, in the Brazilian capital market, the effect of the composition of the board of directors on executive compensation sensitivity to market performance, known as pay-performance sensitivity (PPS). Due to potential agency conflicts between controlling and minority shareholders and between shareholders and managers, members of the board of directors of the executive board or those appointed by the controlling shareholder might have less independence, something which may compromise monitoring effectiveness and, consequently, reduce the PPS. The purpose is contributing to understand the agency conflicts that have taken place in the Brazilian capital market and to define the configuration of the monitoring and compensation mechanisms that minimize total agency costs, maximizing shareholders’ wealth. The research results have implications for understanding the agency relations and for corporate governance in the Brazilian capital market. It is concluded that the relation between the monitoring exercised by the board of directors and executive compensation is a condition for its effectiveness as a governance mechanism in the Brazilian capital market. Data within the period 2013-2015 from 92 companies that participate in the Brazil 100 Index (IBRX 100) of the São Paulo Stock, Mercantile & Futures Exchange (BM&FBOVESPA) were analyzed. In addition to tests of difference between mean values and correlation, estimates were processed through feasible generalized least squares modeling. The independence of the board of directors vis-à-vis the controlling shareholder and the executive board may work as a corporate governance mechanism supplementing executive compensation. The results of this study indicate that the proportion of executives and independent members in the board of directors reduces the PPS, a measurement for executive compensation effectiveness made operational by the contemporary relation between increased managers’ compensation and increased company’s market value.

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26

BABENKO, ILONA. "Share Repurchases and Pay-Performance Sensitivity of Employee Compensation Contracts." Journal of Finance 64, no. 1 (January 23, 2009): 117–50. http://dx.doi.org/10.1111/j.1540-6261.2008.01430.x.

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27

Ouyang, Caiyue, Jiacai Xiong, and Lyu Fan. "Do insiders share pledging affect executive pay-for-performance sensitivity?" International Review of Economics & Finance 63 (September 2019): 226–39. http://dx.doi.org/10.1016/j.iref.2018.10.019.

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28

Chang, Jiajia, Zhijun Hu, and Hui Yang. "Venture Capital Contracting with Ambiguity Sharing and Effort Complementarity Effect." Mathematics 8, no. 1 (January 19, 2020): 140. http://dx.doi.org/10.3390/math8010140.

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In this paper, we established a continuous-time agency model in which an ambiguity-averse venture capitalist (VC) employs an ambiguity-neutral entrepreneur (EN) to manage an innovative project. We analyzed the connection between ambiguity sharing and incentives under double moral hazard. Applying a stochastic dynamic programming approach, we solved the VC’s maximization problem and obtained the Hamilton–Jacobi–Bellman (HJB) equation under a special form of the value function. We showed that the optimal pay-performance sensitivity was a fixed point of a nonlinear equation. The model ambiguity on the probability measure induced a tradeoff between ambiguity sharing and the incentive compensation that improved the EN’s pay-performance sensitivity level. Besides, we simulated the model and showed that when two efforts were complementary, the VC’s effort did not monotonically decrease with respect to the pay-performance sensitivity, while the EN’s effort did not monotonically increase in the pay-performance sensitivity level. More importantly, we found that as efforts tended to be more complementary, the optimal pay-performance sensitivity tended to approach those that maximized the efforts exerted by the EN and the VC.

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Ferrero-Ferrero, Idoya, María Ángeles Fernández-Izquierdo, and María Jesús Muñoz-Torres. "Top executive pay in Spanish banking system." Journal of Management & Organization 20, no. 3 (May 2014): 333–47. http://dx.doi.org/10.1017/jmo.2014.24.

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AbstractThis study examines consistency between compensation systems and corporate performance. The main purpose is to analyse how the performance has affected the short-term executive pay in Spanish banking system during the period 2004–2008. The main results reveal that pay-performance sensitivity is asymmetrical regarding the sign of the variation of the performance, since the pay-performance sensitivity is greater when the variation of the results is positive than when the variation of the results is negative. This finding is consistent with the managerial power theory and calls into question the role of the pay-performance incentives to align interest of executives and shareholders.

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30

Rosser, Bruce A., and Jean M. Canil. "Is there a firm-size effect in CEO stock option grants?" Corporate Ownership and Control 6, no. 1 (2008): 115–26. http://dx.doi.org/10.22495/cocv6i1p12.

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Schaefer (1998) and Baker and Hall (2004) posit a firm size effect for regular executive compensation but not specifically for executive stock option grants. They propose an inverse relation between pay-performance sensitivity and firm size along with a positive relation between the marginal productivity of executive effort and firm size. The product of pay-performance sensitivity and executive productivity is „incentive strength‟. They find a weakly positive association between incentive strength and firm size. We substitute Hall and Murphy‟s (2002) pay-performance sensitivity metric to detect a firm size effect in CEO stock option grants. After adjusting for small-firm risk aversion and private diversification „clienteles‟, we document evidence of a residual small-firm effect impacting on incentive strength principally through grant size. Given lower small-firm deltas, grant size appears to have been increased by compensation committees to ensure small-firm CEOs are not under-compensated relative to their large-firm counterparts. We also find that firm complexity influences pay-performance sensitivity as well, but not labor productivity (proxying for CEO productivity). No evidence is found that firm smallness and complexity impact on labor productivity. However, we empirically confirm a negative relation between pay-performance sensitivity and firm smallness and, by implication, firm complexity.

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31

Gong, James Jianxin. "Examining Shareholder Value Creation over CEO Tenure: A New Approach to Testing Effectiveness of Executive Compensation." Journal of Management Accounting Research 23, no. 1 (December 1, 2011): 1–28. http://dx.doi.org/10.2308/jmar-10105.

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ABSTRACT This paper examines the relationship between CEO compensation and shareholder value added over CEO tenure. The research design exploits two fundamental attributes of CEO compensation and shareholder value added: (1) both CEO compensation and shareholder value added aggregate naturally over CEO tenure, and (2) extending the time interval over which the two variables are measured is likely to result in a better match between CEO compensation and shareholder value created by the CEO. I measure CEO compensation with nominal value of CEO pay, ex post realized pay, and ex ante pay-for-performance sensitivity. I find that CEOs receiving higher nominal or realized pay create more shareholder value. Further, higher median pay-for-performance sensitivity during CEO tenure is associated with higher aggregate market value changes and cumulative abnormal stock returns. Finally, CEO pay efficiency (calculated as the ratio of shareholder value added to CEO pay, both aggregated over CEO tenure) is higher if median pay-for-performance sensitivity during CEO tenure is higher. Data Availability: The data are available from public sources identified in this study.

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32

Feng, Liu. "The Impact of Governance Mechanism of Financial Listed Companies on the Pay and the Pay-Performance Sensitivity of Executives." International Journal of Business and Management 13, no. 3 (February 25, 2018): 233. http://dx.doi.org/10.5539/ijbm.v13n3p233.

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The corporate governance mechanism is very important to solve the principal-agent problem effectively. Based on the particularity of the financial industry, this paper uses the panel data of 45 listed companies in China's financial industry from 2007 to 2015, the empirical results show that the degree of ownership concentration, the duality of CEO and chairman of the board and the independent directors proportion have a significant negative impact on executive pay, and the size of the board of supervisors has no marked impact on executive pay. The degree of ownership concentration has a significant positive impact on the pay-performance sensitivity, and the duality of CEO and chairman of the board, the independent directors proportion and the size of the board of supervisors have a significant negative impact on the pay-performance sensitivity. For the listed companies in the financial sector, they should pay attention to the executive pay disclosure system, the board of supervisors governance mechanism and the independent director system. We can use the degree of ownership concentration to improve the pay-performance sensitivity, and make corporate governance more effective.

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33

Chen, Qi, Shane S. Dikolli, and Wei Jiang. "Career-Risk Concerns, Information Effort, and Optimal Pay-for-Performance Sensitivity." Journal of Management Accounting Research 27, no. 2 (June 1, 2015): 165–95. http://dx.doi.org/10.2308/jmar-51165.

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ABSTRACT Prior work has established that managers' concerns about the level of their future compensation (i.e., implicit incentives from career concerns) may substitute for explicit incentives in compensation contracts offered to the managers in a single-task setting (Gibbons and Murphy 1992). We show that the substitution effect can be weakened, and even reversed, when managers (1) exert effort, in addition to production effort, to influence information about their ability, and (2) are concerned about both the level and variability of their reputation. We also find that managerial concern about the variability of reputation can lead to the optimal pay-for-performance sensitivity increasing in the underlying risk measure, rather than decreasing in risk, as in standard incentive-risk trade-offs. We test these predictions using a large sample of CEO compensation outcomes. Results are consistent with our model predictions.

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34

Lippert, Robert L., and William T. Moore. "COMPENSATION CONTRACTS OF CHIEF EXECUTIVE OFFICERS: DETERMINANTS OF PAY-PERFORMANCE SENSITIVITY." Journal of Financial Research 17, no. 3 (September 1994): 321–32. http://dx.doi.org/10.1111/j.1475-6803.1994.tb00195.x.

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35

Huang, Jianhui, Ling Liu, and Ingrid C. Ulstad. "Growth options and relative performance evaluation." International Journal of Accounting and Information Management 24, no. 1 (March 7, 2016): 38–55. http://dx.doi.org/10.1108/ijaim-10-2014-0067.

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Purpose – The purpose of this study is to investigate the cross-sectional associations between growth options and the peer pay–performance sensitivity of CEO compensation. Design/methodology/approach – This study includes analytical analysis and multivariable regression analysis. Findings – It is predicted in this study that there is a non-linear concave relation between peer pay–performance sensitivity and a firm’s growth options. Results based on the executive compensation data from ExecuComp are consistent with the hypothesis presented in this study. Research limitations/implications – Future scholars need to consider the non-linear impact of growth options on peer pay–performance sensitivity when they conduct research related to CEO compensation by differentiating the company’s growth options to be at a low, medium and high level. In an industry, when a compensation committee decides on the peers for performance comparison purposes, the committee needs to make sure that the peer firms they select have similar operational environments, for example, they face similar growth options (e.g. low, medium or high) and idiosyncratic variances. Practical implications – This study contributes to the managerial compensation literature by revealing the important role growth options, as well as idiosyncratic variances, play on peer pay–performance sensitivity. The results of this study have implications for both future researchers as well as industrial practitioners. Social implications – It gives guidance on designing CEO compensation contracts. Originality/value – This is an original work from the coauthors listed on this study.

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36

Gao, Ning, and Kenneth Small. "Evidence on board size and its impact on CEO pay-performance sensitivity." Corporate Ownership and Control 7, no. 4 (2010): 223–51. http://dx.doi.org/10.22495/cocv7i4c2p1.

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Recent literature asserts that board size is one of the crucial determinants in board monitoring. We conjecture optimal board size leads to effective and efficient decision-making. Using a U.S. firm sample from year 1996 to 2005, we examine whether board size has any impact on one of the main tasks of board monitoring – appropriate compensation for CEOs. Specifically, we investigate if board size is associated with CEOs’ pay-performance sensitivity. Agency theory suggests top managers’ compensation be structured in alignment with shareholder wealth. If a board is vigilant, managers who create (destroy) wealth should be rewarded (penalized). By using value added models, we construct a new sensitivity measure of CEO compensation to wealth added per share. Our findings indicate that there is a non-linear relationship between board size and CEO pay-performance sensitivity. As the board size becomes bigger, the pay-performance sensitivity follows a pattern that first increases and then decreases.

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Campbell, Jesse W., and Tobin Im. "Exchange Ideology, Performance Pay, and Pay Satisfaction: Evidence From South Korean Central Government." Public Personnel Management 48, no. 4 (March 11, 2019): 584–607. http://dx.doi.org/10.1177/0091026019832632.

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The use of performance pay in public organizations is contentious partly because it can crowd out the intrinsic motivation associated with public service. However, not all public employees are service oriented and sensitivity to extrinsic rewards varies between them. Exchange ideology measures the strength of an individual’s belief that work effort should be proportional to treatment by the organization. We argue that this psychological trait conditions the relationship between performance pay and pay satisfaction. An analysis of survey data collected from Korean government employees shows that performance pay is positively related to pay satisfaction in the average case, and second that this relationship is stronger for employees with higher levels of exchange ideology. Monte Carlo simulations suggest that the size of the moderating effect is nontrivial. We discuss the relevance of our findings to performance-oriented human resource reform in the public sector.

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38

Shin, Jae Yong, and Jeongil Seo. "Less Pay and More Sensitivity? Institutional Investor Heterogeneity and CEO Pay." Journal of Management 37, no. 6 (June 11, 2010): 1719–46. http://dx.doi.org/10.1177/0149206310372412.

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In this article, the authors develop and test a theory on the effect of institutional investor heterogeneity on CEO pay. Their theory predicts that institutional investors’ incentives and capabilities to monitor CEO pay are determined by the fiduciary responsibilities, conflicts of interest, and information asymmetry that institutional investors face. Their theory suggests, in contrast to previous literature, that public pension funds and mutual funds exert different effects on CEO pay at their portfolio firms because they do not have the same monitoring incentives and capabilities. Using a longitudinal sample of S&P 1500 firms for the years 1998 to 2002, the authors find that public pension fund ownership is more negatively—indeed, oppositely—associated with both the level of CEO pay and CEO pay-for-performance sensitivity than mutual fund ownership. Their findings suggest that (a) researchers’ use of institutional investor classifications that do not distinguish public pension fund ownership and mutual fund ownership can be misleading and (b) while CEO pay critics have called for pay plans that are in line with the “less pay and more sensitivity” principle, this may be an ineffective goal to pursue.

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Seo, Jeongil. "Board Effectiveness and CEO Pay: Board Information Processing Capacity, Monitoring Complexity, and CEO Pay-for-Performance Sensitivity." Human Resource Management 56, no. 3 (November 20, 2015): 373–88. http://dx.doi.org/10.1002/hrm.21769.

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40

Bussin, Mark, and Sean Barrett. "The effect of race on CEO pay-performance sensitivity in South Africa." African Journal of Employee Relations (Formerly South African Journal of Labour Relations) 40, no. 2 (February 18, 2019): 8–29. http://dx.doi.org/10.25159/2520-3223/5850.

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South Africaâ€™s labour policies and the growing societal calls to better explain executive remuneration create a unique opportunity to examine the effects of race on CEO pay. This empirical research study sought to investigate the effects of race on the sensitivity of executive pay to corporate performance. The study aims to contribute to the literature by providing an evidence-based approach to understanding the effect of race on CEO remuneration. The research design was quantitative, descriptive and longitudinal in nature, utilising validated secondary data sources. The sample consisted of 19 black CEOs and a random sample of 45 white CEOs. All components of South African CEO remuneration studied were found to correlate strongly with PAT (Profit after Tax) and EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) and to a lesser degree with ROE (Return on Equity) and HEPS (Headline Earnings per Share). Black and white CEO mean remuneration was found to show no significant difference as a result of race. A notable difference found was the higher degree of payperformance sensitivity and variability seen within the black CEO sample. The study showed that race does not affect the level of CEO remuneration but does impact on pay-performance sensitivity and variability.

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41

Kuncheva, Billyana. "Pay-Performance Sensitivity and Firm Size: Insights from the Mutual Fund Industry." CFA Digest 40, no. 4 (November 2010): 49–51. http://dx.doi.org/10.2469/dig.v40.n4.18.

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42

Iyengar, Raghavan (Raj) J., H. James Williams, and Ernest M. Zampelli. "Sensitivity of executive pay to accounting performance measures in all-equity firms." Accounting and Finance 45, no. 4 (December 2005): 577–95. http://dx.doi.org/10.1111/j.1467-629x.2005.00143.x.

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Schaefer, Scott. "The Dependence of pay—Performance Sensitivity on the Size of the Firm." Review of Economics and Statistics 80, no. 3 (August 1998): 436–43. http://dx.doi.org/10.1162/003465398557537.

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Park, Bum-Jin. "Auditors’ Economic Incentives and the Sensitivity of Managerial Pay to Accounting Performance." Australian Accounting Review 27, no. 4 (May 15, 2017): 382–99. http://dx.doi.org/10.1111/auar.12154.

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Yang, Tianna, and Wenxuan Hou. "Pay-performance sensitivity and risk-taking behaviors: Evidence from closed-end funds." Emerging Markets Review 29 (December 2016): 274–88. http://dx.doi.org/10.1016/j.ememar.2016.08.015.

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Chen, Donghua, Yongjian Shen, Fu Xin, and Tianqin Zhang. "Overemployment, executive pay-for-performance sensitivity and economic consequences: Evidence from China." China Journal of Accounting Research 5, no. 1 (March 2012): 1–26. http://dx.doi.org/10.1016/j.cjar.2012.03.001.

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Cashman, George D. "Pay-performance sensitivity and firm size: Insights from the mutual fund industry." Journal of Corporate Finance 16, no. 4 (September 2010): 400–412. http://dx.doi.org/10.1016/j.jcorpfin.2010.04.003.

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Chahine, Salim, and Marc Goergen. "Top management ties with board members: How they affect pay–performance sensitivity and IPO performance." Journal of Corporate Finance 27 (August 2014): 99–115. http://dx.doi.org/10.1016/j.jcorpfin.2014.04.007.

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Ikram, Atif, Zhichuan (Frank) Li, and Travis MacDonald. "CEO Pay Sensitivity (Delta and Vega) and Corporate Social Responsibility." Sustainability 12, no. 19 (September 25, 2020): 7941. http://dx.doi.org/10.3390/su12197941.

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Abstract:

We use CEO pay sensitivity to stock performance (delta) and stock volatility (vega) to provide empirical evidence that CEO compensation structure influences firm Corporate Social Responsibility (CSR) performance. We find that delta has no significant effect on CSR, while vega has a strong, causal relationship with CSR. Our findings suggest that CEOs do not view CSR as value enhancing, but as a way to increase their own compensation through vega. Firms that want to improve their social performance should consider vega as an important compensation incentive for executives.

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孙, 丽. "Research on Executive Pay Performance Sensitivity Structure of Chinese State-Owned Listed Companies." Finance 06, no. 02 (2016): 74–88. http://dx.doi.org/10.12677/fin.2016.62008.

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