Does the Founder CEO Receive a Higher Pay for the Firm’s Performance? Evidence from Malaysia

IF 0.5 Q4 ECONOMICS

Malaysian Journal of Economic Studies Pub Date : 2023-07-11 DOI:10.22452/mjes.vol60no1.1

S. Foong, B. Lim

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Abstract

This paper examines whether firms run by a founder chief executive officer (CEO) have higher pay and whether their power sources from chairing the board, remuneration committee, tenureship, or share ownership affect the pay-performance nexus. Data for the study was hand-collected amongst 362 family-owned firms listed in Bursa Malaysia from 2009 to 2015 and analysed via the generalized method of moments (GMM) system to address endogeneity. The results showed that initially there was a significant positive pay-performance relationship in Malaysian family-owned firms; however, the founder CEOs had a weak influence on the pay-performance nexus. Secondly, the founder CEOs’ influences on the pay-performance nexus mainly came from their ownership power and their structural power as the chairman of the board. Thirdly, the pay-performance nexus tended to be positive and stronger when the family member of the CEO was chairing the board of directors and remuneration committee, instead of themselves, but the relationship changed to negative when more independent directors sat on the board, including a remuneration committee. The findings offered some policy implications for the regulators to enhance corporate transparency on the directors’ remuneration and ownership.

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创始人兼首席执行官是否因公司业绩而获得更高的薪酬？来自马来西亚的证据

本文考察了由创始人首席执行官(CEO)管理的公司是否有更高的薪酬，以及他们的权力来源——董事会主席、薪酬委员会主席、任期或股权——是否会影响薪酬绩效关系。该研究的数据是在2009年至2015年在马来西亚证券交易所上市的362家家族企业中手工收集的，并通过广义矩量法(GMM)系统进行分析，以解决内生性问题。结果表明，马来西亚家族企业最初存在显著的正向薪酬绩效关系;然而，创始人ceo对薪酬绩效关系的影响较弱。其次，创始人ceo对薪酬绩效关系的影响主要来自于他们的所有权和作为董事会主席的结构性权力。第三，当CEO家族成员担任董事会和薪酬委员会主席而不是CEO本人担任董事会和薪酬委员会主席时，薪酬与绩效关系趋于正相关且更强，但当独立董事担任董事会主席(包括薪酬委员会)时，薪酬与绩效关系变为负相关。研究结果为监管机构提高公司董事薪酬和所有权透明度提供了一些政策启示。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Malaysian Journal of Economic Studies ECONOMICS-

CiteScore

1.30

自引率

25.00%

发文量

期刊介绍： The primary purpose of the journal is to promote publications of original research related to the Malaysian economy. It is also designed to serve as an outlet for studies on the South-east Asian countries and the Asian region. The journal also considers high-quality works related to other regions that provide relevant policy lessons to Malaysia. The journal is receptive to papers in all areas of economics. We encourage specifically contributions on all range of economic topics of an applied or policy nature. At the same time, submissions of methodological or theoretical studies with results that are of practical use are welcome. Works that are interdisciplinary will be considered provided that they contain substantial economic contents.