Financial indicators of company performance in different industries that affect CEO remuneration in South Africa

Bussin, Mark and Blair, Chris (2015) Financial indicators of company performance in different industries that affect CEO remuneration in South Africa. South African Journal of Economic and Management Sciences, 18 (4). pp. 534-550.

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Official URL: https://doi.org/10.4102/sajems.v18i4.1249

Abstract

In an attempt to address the growing gap between chief executive officer (CEO) remuneration and that of the general worker, reign in rising CEO remuneration, and justify the portion of long-term incentive pay that makes up the bulk of CEO remuneration, shareholders and other stakeholders are trying to find definitive factors that will link CEO remuneration to company performance. Finding this link has become central to all executive remuneration issues. The results of the studies linking CEO remuneration to company performance are varied and inconclusive, particularly in South Africa. The reason for this is that previous studies have not looked at whether the company performance measures chosen have definite relationships with CEO remuneration in each industry. This study investigated eleven financial indicators of company performance to determine which of them have significant and positive relationships to CEO remuneration in different industries in South Africa. 254 South African listed companies, spread over 5 industries, were analysed for the period 2008 to 2012 using panel data analysis and statistical tests. The results were conclusive, finding performance metrics that had a positive and significant relationship to CEO remuneration in 4 of the 5 industries investigated, as well as over the aggregate of all the industries.

Item Type: Article
Journal / Publication Title: South African Journal of Economic and Management Sciences
Publisher: AOSIS
ISSN: 2222-3436
Departments: Business
Additional Information: Chris Blair completed a Master of Business Administration (M.B.A.) in Leadership & Sustainability at the University of Cumbria, UK, 2011-2014. This work is licensed under CC Attribution 4.0.
Depositing User: Anna Lupton
Date Deposited: 04 Apr 2019 16:08
Last Modified: 04 Apr 2019 16:08
URI: http://insight.cumbria.ac.uk/id/eprint/4612

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