Factors affecting CEO compensation: an empirical investigation from emerging markets

Gehan A. Mousa

Afro-Asian Journal of Finance and Accounting, 2023, vol. 13, issue 6, 759-779

Abstract: This study examines determinants of the CEO compensation using a sample of 1,044 firm-year observations from six emerging markets covering the period from 2015-2018. The study conducts a backword regression analysis to examine the effect of some governance structure variables and firm attributes on the total cash of CEO compensation. The findings of the study show that governance structure variables, such as blockholder ownership and CEO duality, have a significant effect on total cash of CEO compensation while, board size and board independence are insignificant factors. Companies with blockholder ownership pay more CEO compensation suggesting that blockholder ownership is not a good governance mechanism to monitor corporate boards' decisions. Companies with CEO duality tend to pay more compensation. This result suggests that the presence of the CEO in boards reduces the efficiency of the board in monitoring managerial decisions such as CEO compensation, which agrees with the agency view.

Keywords: CEO compensation; board features; financial performance; governance structure. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ids:afasfa:v:13:y:2023:i:6:p:759-779

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