CEO compensation and shareholder value creation: impact on corporate governance in India. (15th December 2021)

• Record Type: Journal Article
• Authors: Sridhar, I.; Jasrotia, Sahil Singh
• Is Part Of: International journal of business innovation and research. Volume 26:Number 4(2021)
• Page Start: 504
• Page End: 516
• Publication Date: 2021-12-15
• Subjects: corporate governance -- CEO -- executive compensation -- shareholder value creation -- India; Management science -- Research -- Periodicals; Industrial management -- Technological innovations -- Periodicals; Industrial management -- Research -- Periodicals; 658.0072
• Languages: English
• ISSNs: 1751-0252

Abstract

The issue of CEO compensation has been a sticky point both in the developed market and emerging market economies. The purpose of this paper is to provide empirical evidence about the linkages between CEO compensation and shareholder value creation thus enabling good corporate governance environment. Our study provides an interesting natural experiment to test the ageless question of whether a socialistic approach to executive compensations affects economic efficiency. Our finding is a clear departure from the CEO compensation experiences in the developed countries where large scale excesses and mismatches were reported. The study finds that good corporate governance stands established, if the CEO pay is linked to shareholder value creation.