CEO pay, firm performance, and corporate governance in India's listed firms. (30th November 2009)

• Record Type: Journal Article
• Authors: Jaiswall, Manju; Firth, Michael
• Is Part Of: International journal of corporate governance. Volume 1:Number 3(2009)
• Page Start: 227
• Page End: 240
• Publication Date: 2009-11-30
• Subjects: top management pay -- financial performance -- corporate governance -- remuneration committee -- family business -- CEO pay -- CEO compensation -- India -- firm performance; Corporate governance -- Periodicals; 658.4
• Languages: English
• ISSNs: 1754-3037

Abstract

In this study we examine the determinants of CEO compensation in large listed Indian companies. There is a positive relation between pay and a firm's performance. We find that remuneration committees are related to higher CEO compensation and there is no association between remuneration committees and pay-performance sensitivities. Thus, remuneration committees do not act in the way predicted by governance guidelines. CEOs in family firms are paid more. This suggests that CEOs use their power as a member of the controlling family to obtain higher compensation. The minority shareholders are therefore disadvantaged. CEOs in risky firms are paid less.