Determinants of chief executive officers remuneration for Johannesburg Stock Exchange listed financial service organisations

ORIENTATION : Research is inconclusive regarding which factors that determine Chief Executive Officers (CEO) remuneration. There is evidence of a positive link between the risky actions taken by CEOs, incentivised by their remuneration structure, which contributed to the financial crisis of 2008. RESEACRH PURPOSE : The purpose of this study was to determine whether organisation size and organisation performance were determinants of CEO remuneration and to what degree. MOTIVATION FOR THE STUDY : No consensus on a model, a set of variables, or a consistent view defines the principles of remuneration setting at the CEO level across organisations or industries. This study intended to provide further clarity on the matter. RESEARCH APPROACH/DESIGN AND METHOD : The research employed a mono-method methodology, and the study was longitudinal in nature. Secondary data were collected over a 5-year period (2015–2019) using a homogenous purposive sampling method. Statistical analysis was performed to analyse the data. MAIN FINDINGS : Organisation size was not found to be a significant determinant of CEO remuneration in financial services organisations listed on the Johannesburg Stock Exchange (JSE). In contrast, organisation performance was found to be a significant determinant of CEO remuneration. PRACTICAL/MANAGERIAL IMPLICATIONS : This study serves as a baseline for best practice, enabling remuneration committees to leverage when setting CEO remuneration, to ensure that the outcomes driven by remuneration are in line with the best interests of all stakeholders within the organisation. CONTRIBUTION/VALUE-ADD : The findings add to the body of knowledge on this topic and create an evidence base showing whether these exorbitant remuneration packages are performance driven or if they are merely driven by managerial power.http://www.sajhrm.co.zaam2023Gordon Institute of Business Science (GIBS

Determinants of CEO remuneration, for JSE listed financial service organisations

Research Background: Years of academic research has resulted in an inconclusive view on which factors determine a CEOs remuneration. As such, the quantum of the wage premium paid to CEOs, relative to employees at all other levels, has been a contentious topic that has been discussed for decades, with research on the topic dating back to the 1980s. In the late 2000s, the topic resurfaced in the media, after CEOs of multinational corporations had been linked to the outcomes of various scandals. And evidence showed that there was a positive link between the risky actions taken by CEOs, incentivised by their remuneration structure, which contributed to the financial crisis of 2008. Research Purpose and Design: The purpose of this study was to determine whether organisation size and organisation performance were determinants of CEO remuneration, and to what degree. The study focussed on JSE listed organisations in the financial services sector. And the sample was made up of the top 15 organisations, based on their market capitalisation. Data was collected over a five-year period, spanning 2015-2019. Main Findings: The main findings of this research indicate that organisation size is not a significant determinant of CEO remuneration, for financial services organisations, listed on the JSE. In contrast, organisation performance was found to be a significant determinant of CEO remuneration. These findings add to the body of knowledge on this topic and create an evidence base, showing that the remuneration packages set by these organisations, are performance driven.Mini Dissertation (MBA)--University of Pretoria, 2020.pt2021Gordon Institute of Business Science (GIBS)MBAUnrestricte