Ownership Concentration and Sensitivity of Executive Pay to Accounting Performance Measures: Evidence from Publicly and Privately-Held Insurance Companies

37 Pages Posted: 30 Nov 1998

See all articles by Bin Ke

Bin Ke

National University of Singapore

Kathy R. Petroni

Michigan State University - Eli Broad College of Business and Eli Broad Graduate School of Management

Assem Safieddine

American University of Beirut - Olayan School of Business

Abstract

We investigate the relation between CEO compensation and accounting performance measures in a sample of publicly- and privately-held property-liability insurance companies. We find a significant positive association between return on assets and the level of compensation for publicly-held insurers. Consistent with optimal contracting theory, we find no such relationship for privately-held insurers. We also find that the change in compensation is significantly more sensitive to the change in return on assets for publicly-held insurers than privately-held insurers. Results suggest that within privately-held firms, CEO compensation is less based on objective measures like accounting information and more on subjective measures.

JEL Classification: C23, J33, M40, M46

Suggested Citation

Ke, Bin and Petroni, Kathy Ruby and Safieddine, Assem M., Ownership Concentration and Sensitivity of Executive Pay to Accounting Performance Measures: Evidence from Publicly and Privately-Held Insurance Companies. Available at SSRN: https://ssrn.com/abstract=138838 or http://dx.doi.org/10.2139/ssrn.138838

Bin Ke

National University of Singapore ( email )

Mochtar Riady Building, BIZ 1, #07-54
15 Kent Ridge Drive
Singapore, 119245
Singapore
+6566013133 (Phone)

Kathy Ruby Petroni (Contact Author)

Michigan State University - Eli Broad College of Business and Eli Broad Graduate School of Management ( email )

East Lansing, MI 48824-1121
United States
517-432-2924 (Phone)
517-432-1101 (Fax)

Assem M. Safieddine

American University of Beirut - Olayan School of Business ( email )

Bliss Street
Beirut 1107 2020
Lebanon
961 1 374374 (Phone)

HOME PAGE: http://sb.aub.edu.lb/faculty/nbk.asp

Register to save articles to
your library

Register

Paper statistics

Downloads
1,094
rank
18,396
Abstract Views
5,312
PlumX Metrics