Rewarding growth or profit?: Top management team compensation and governance in Japanese MNEs

J. Michael Geringer, Colette A. Frayne and David Olsen

Journal of International Management, 1998, vol. 4, issue 4, 289-309

Abstract: Japanese multinational enterprises (MNEs) have been popularly characterized as pursuing competitive strategies emphasizing long-term performance, especially growth in sales and market share, rather than shorter term profit performance. Though prior research has emphasized the importance of linking compensation to organizational goals and performance, the relationship between performance and compensation of Japanese executives has received limited empirical attention. This paper provides a preliminary examination of how Japanese top management teams in the 106 largest industrial MNEs were compensated, particularly for performance on sales growth and profitability criteria, over the 1976-1993 time period. The relationships revealed between organizational performance and the bonus compensation of top management teams suggest that the emphasis of Japanese industrial MNEs regarding sales growth versus profitability may not be as simple as suggested by prior studies and popular characterizations.

Keywords: Executive; compensation; Japanese; multinationals; Governance (search for similar items in EconPapers)
Date: 1998
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