Title: Factors affecting CEO compensation: an empirical investigation from emerging markets

Authors: Gehan A. Mousa

Addresses: Accounting Department, Faculty of Commerce, Benha University, Fareed Nada Street, Banha, Al Qalyubia Governorate 13511, Egypt

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.

DOI: 10.1504/AAJFA.2023.134692

Afro-Asian Journal of Finance and Accounting, 2023 Vol.13 No.6, pp.759 - 779

Received: 16 Jan 2021
Accepted: 16 Jun 2021
Published online: 06 Nov 2023 *

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