Does National Culture Impact Pay-for-Performance and Gender Pay-Gap in Executive Compensation?

Posted: 10 Aug 2021

See all articles by Wissam Abdallah

Wissam Abdallah

Lebanese American University

Yang Zhao

University of Liverpool - Management School (ULMS)

Date Written: February 28, 2020

Abstract

The paper examines the impact of culture on executive compensation. Using a sample of 8025 firms from 17 countries and employing GLOBE cultural dimensions, we find that culture has a significant explanatory power in cross-country executive compensation practices. We contribute to the existing literature by demonstrating how culture affects the relationship between performance and compensation as well as compensation disparity in the boardroom. In particular, we find that in assertive and individualistic societies, compensation is closely related to performance and that compensation disparity is lower among the top management team. Our results reveal more insights on the relationship between culture and compensation practices.

Keywords: CEO, Compensation, Culture, GLOBE, Pay-gap, Pay-for-Performance

JEL Classification: G14, G31

Suggested Citation

Abdallah, Wissam and Zhao, Yang, Does National Culture Impact Pay-for-Performance and Gender Pay-Gap in Executive Compensation? (February 28, 2020). Available at SSRN: https://ssrn.com/abstract=3545996

Wissam Abdallah (Contact Author)

Lebanese American University ( email )

P.O. Box 13-5053
Chouran Beirut 11022801
Beirut
Lebanon

HOME PAGE: http://sb.lau.edu.lb/faculty-research/faculty/fa/dr-wissam-abdallah-1.php

Yang Zhao

University of Liverpool - Management School (ULMS) ( email )

Chatham Street
Liverpool, L69 7ZH
United Kingdom

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