Relationship between top executive compensation and corporate governance: evidence from large Italian listed companies

Andrea Nannicini (), Duarte Pitta Ferraz () and Ilídio Tomás Lopes ()
Additional contact information
Andrea Nannicini: Universidade Nova de Lisboa
Duarte Pitta Ferraz: Universidade Nova de Lisboa
Ilídio Tomás Lopes: Instituto Universitário de Lisboa (ISCTE-IUL)

International Journal of Disclosure and Governance, 2018, vol. 15, issue 4, No 1, 197-209

Abstract: Abstract The modernization of corporate governance aims the alignment of the interests of managers with those of companies, promoting a new discipline of internal controls and risk analysis with an enforcement of shareholder rights of information. This research investigates the impact of corporate governance variables—ownership, board of directors and remuneration committee—on executive compensation. A balanced sample of 52 Italian listed companies has been adopted to test the hypotheses, covering 55.98% and 47.13% of market capitalization in 2011 and 2015, respectively, and including 669 board members. Theoretical models evidence a certain stability of compensation schemes for Italian managers over time. Findings suggest that there is a statistically significant positive effect of familiar ownership on the amount of compensation. Along with the nature of ownership, the number of directors in the remuneration committee appointed by minorities assumes a determinant role. With statistical significance, it affects negatively the compensation level, but, contrarily to best practices, it affects negatively the adoption of forms of incentive compensation.

Keywords: Executive compensation; Corporate governance; Remuneration committee; Family firms; Italy (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1057/s41310-018-0050-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:ijodag:v:15:y:2018:i:4:d:10.1057_s41310-018-0050-2

Ordering information: This journal article can be ordered from
https://www.palgrave.com/gp/journal/41310

DOI: 10.1057/s41310-018-0050-2

Access Statistics for this article

International Journal of Disclosure and Governance is currently edited by Michael Alles

More articles in International Journal of Disclosure and Governance from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().