The determinants and performance consequences of the CEO pay slice

University of Technology, Sydney. Faculty of Business.There is an emerging literature which focuses on the proportion of the CEO’s pay as a percentage of all senior executives’ pay (the CEO pay slice). This literature tests the association between the CEO pay slice and different economic activities but stays silent on the key drivers of the observed variations in the CEO pay slice. This thesis develops a theoretical framework for the economic determinants of the CEO pay slice (CPS) and tests this framework using a sample of 9,978 U.S. listed firms for the period 2001-2010. This thesis also provides evidence on the performance consequences of firms with an inefficient CPS. The findings in this thesis indicate that the CPS reflects rational allocation of decision authority between the CEO and senior executives. This allocation of decision authority is driven by firms' economic characteristics including the degree of business diversification, R&D intensity, and growth options. The CPS also reflects the market for CEO talent. There is limited evidence that an inefficient CPS is related to subsequent firm performance. No relation is found between inefficient CPS and accounting returns, however a negative relation is found between inefficient CPS and subsequent market returns. This thesis finds no evidence supporting the alternative managerial power explanation of the CPS as no relation is found between the CPS and proxies for CEO power, or between the CPS and subsequent accounting or market based firm performance. The findings in this thesis are consistent with respect to a number of sensitivity tests

A preventive maintenance cost model application

This thesis has developed a proposed model for the solution of the problem of determining, on the basis of cost, how to maintain industrial equipment subject to wearout failure. Bayesian statistics are used to determine the parts or pieces of equipment which contribute the most to system failure

Is there a gender gap in CEO compensation?

The gender pay gap generates significant political and social debate. This study contributes to this discussion by examining if a gender pay gap exists at the highest level of corporate management, the CEOs. While previous studies have documented a gender pay gap for most levels of executives the findings with respect to CEOs are conflicting. In this paper we focus only on CEO's as it is the most homogenous of executive roles and does not require us to assume that executives with similar titles undertake identical roles. Our evidence is based on 291 US firm-years for the period of 1998-2010. We do not find any association between CEO pay and gender using both the total sample and a sample matched using propensity scores to control for firm characteristics. These insignificant results hold for total pay, salary and bonuses, and for different matching procedures and econometric specifications. Our results therefore indicate that women who rise through the "glass ceiling" to the level of CEO are remunerated at similar levels to their male counterparts. © 2012 Elsevier B.V.

The Association Between Gender-Diverse Compensation Committees and CEO Compensation

© 2015, Springer Science+Business Media Dordrecht. We examine the association between gender-diverse compensation committees and CEO pay and find that CEO compensation levels are negatively associated with gender-diversity of the compensation committee, but not gender-diversity of the board. Furthermore, we find that excess CEO compensation is negatively related to subsequent return on assets for firms with an all-male compensation committee but not for firms with a gender-diverse compensation committee. These results suggest that CEOs do receive some level of excess compensation which can be mitigated by having one or more females on the compensation committee

Powerful CEOs, cash bonus contracts and firm performance

© 2019 John Wiley & Sons Ltd We investigate whether powerful chief executive officers (CEOs) influence the conditions of their cash bonus contracts. Specifically, we examine (i) the association between CEO power and the proportion of ex-ante cash bonus to base salary (bonus ratio), (ii) the association between CEO power and the relative use of non-financial to financial performance targets in cash bonus contracts, and (iii) the performance consequences of incorporating non-financial targets in cash bonus contracts. Results show that powerful CEOs are associated with greater ex-ante bonus ratios and higher proportions of non-financial performance targets compared to less powerful CEOs. Furthermore, the use of quantitative and corporate social responsibility (CSR)-related non-financial performance targets is positively associated with subsequent firm performance, and the use of undefined non-financial performance targets is negatively associated with subsequent firm performance. These results are robust to alternative econometric specifications and variable definitions