Remuneration Committee, Ownership Structure and Pay-for-Performance: Evidence from Malaysia
affiliation not provided to SSRN
Wan Nordin Wan-Hussin
Universiti Utara Malaysia - College of Business
November 29, 2009
We examine the association between remuneration committee and ownership structures on pay-for-performance. We find that appropriately structured remuneration committee and institutional shareholders enhance the pay-for-performance elasticity which lends credence to their monitoring role. We also find that pay-for-performance relationship is weaker at high level of managerial ownership, consistent with agency theory prediction. However, we also show that among pay-without-performance firms, executives earn higher pay as managerial ownership increases, which suggests that rent extraction through overcompensation is likely, in tandem with managerial power theory. The evidence shows that both the principal-agent and managerial power views are relevant in explaining executive pay in Malaysia.
Number of Pages in PDF File: 42
Keywords: corporate governance, executive compensation, compensation committee, ownership, Malaysiaworking papers series
Date posted: December 2, 2009
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo4 in 0.547 seconds