{"title":"Are executive pay and firm performance related? Evidence-based on meta-regression analysis","authors":"Madhur Bhatia, Rachita Gulati, Sunil Kumar","doi":"10.1007/s10490-024-09979-9","DOIUrl":null,"url":null,"abstract":"<p>The empirical research on executive pay has garnered growing interest in recent years; however, these studies produce inconclusive evidence. Thereby, this study endeavors to quantitatively synthesize the results of the 137 research studies on the performance-pay relationship while factoring both institutional contexts (cross-sectional heterogeneity) and institutional dynamics (longitudinal heterogeneity). The meta-regression results corroborate the agency’s viewpoint that a positive and statistically significant relation exists between executive pay and firm performance. However, the variations in corporate governance systems substantially impact the relationship between performance and remuneration, highlighting the importance of the managerial power approach. As determined by the temporal analysis, this association has weakened over time, which is substantially attributable to the development of sound regulatory policies, the growing significance of alternative governance practices, analytical approaches, and firm nature. Furthermore, it is noted that with the convergence in governance practices, the moderating impact of different institutional contexts has become statistically less significant over time. Our results unequivocally demonstrate the critical role that institutional dynamics play in moderating the performance-pay relationship. This way, the study answers unresolved queries about the performance-pay association.</p>","PeriodicalId":8474,"journal":{"name":"Asia Pacific Journal of Management","volume":null,"pages":null},"PeriodicalIF":4.9000,"publicationDate":"2024-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Asia Pacific Journal of Management","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1007/s10490-024-09979-9","RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"MANAGEMENT","Score":null,"Total":0}
引用次数: 0
Abstract
The empirical research on executive pay has garnered growing interest in recent years; however, these studies produce inconclusive evidence. Thereby, this study endeavors to quantitatively synthesize the results of the 137 research studies on the performance-pay relationship while factoring both institutional contexts (cross-sectional heterogeneity) and institutional dynamics (longitudinal heterogeneity). The meta-regression results corroborate the agency’s viewpoint that a positive and statistically significant relation exists between executive pay and firm performance. However, the variations in corporate governance systems substantially impact the relationship between performance and remuneration, highlighting the importance of the managerial power approach. As determined by the temporal analysis, this association has weakened over time, which is substantially attributable to the development of sound regulatory policies, the growing significance of alternative governance practices, analytical approaches, and firm nature. Furthermore, it is noted that with the convergence in governance practices, the moderating impact of different institutional contexts has become statistically less significant over time. Our results unequivocally demonstrate the critical role that institutional dynamics play in moderating the performance-pay relationship. This way, the study answers unresolved queries about the performance-pay association.
期刊介绍:
The Asia Pacific Journal of Management publishes original manuscripts on management and organizational research in the Asia Pacific region, encompassing Pacific Rim countries and mainland Asia. APJM focuses on the extent to which each manuscript addresses matters that pertain to the most fundamental question: “What determines organization success?” The major academic disciplines that we cover include entrepreneurship, human resource management, international business, organizational behavior, and strategic management. However, manuscripts that belong to other well-established disciplines such as accounting, economics, finance, marketing, and operations generally do not fall into the scope of APJM. We endeavor to be the major vehicle for exchange of ideas and research among management scholars within or interested in the broadly defined Asia Pacific region.Key features include:
Rigor - maintained through strict review processes, high quality global reviewers, and Editorial Advisory and Review Boards comprising prominent researchers from many countries.
Relevance - maintained by its focus on key management and organizational trends in the region.
Uniqueness - being the first and most prominent management journal published in and about the fastest growing region in the world.
Official affiliation - Asia Academy of ManagementFor more information, visit the AAOM website:www.baf.cuhk.edu.hk/asia-aom/ Officially cited as: Asia Pac J Manag