CFO Compensation: Evidence from Australia
dc.contributor.author | Duong, Lien | |
dc.contributor.author | Evans, John | |
dc.date.accessioned | 2017-01-30T15:18:36Z | |
dc.date.available | 2017-01-30T15:18:36Z | |
dc.date.created | 2015-10-07T04:04:46Z | |
dc.date.issued | 2015 | |
dc.identifier.citation | Duong, L. and Evans, J. 2015. CFO Compensation: Evidence from Australia. Pacific-Basin Finance Journal. 35 pt.A: pp. 425-443. | |
dc.identifier.uri | http://hdl.handle.net/20.500.11937/45116 | |
dc.identifier.doi | 10.1016/j.pacfin.2015.03.006 | |
dc.description.abstract |
We investigate the extent to which the incentive alignment theory and the managerial power theory explain the variability of CFO compensation in Australia. We find a positive relationship between the level of CFO compensation and measures of job complexity and firm stock market performance. However, we do not find the pay-for-performance link when performance is measured at the CFO-specific level. CFOs actually receive higher non-cash compensation when reporting quality is lower, suggesting a sharp contrast to predictions of the incentive alignment approach. Conversely, we find that CFOs who have more managerial power (the CFO is on the board of directors, or holds a higher level of stock ownership, or stays longer in their position) receive significantly higher compensation. For example, a CFO who has board membership receives on average $323,590 more than the total compensation of a CFO who is not a board insider. Overall both theories are important in determining Australian CFO compensation but the managerial power hypothesis explains a larger fraction of variation in CFO pay than the incentive alignment view. | |
dc.publisher | Elsevier | |
dc.title | CFO Compensation: Evidence from Australia | |
dc.type | Journal Article | |
dcterms.source.volume | - | |
dcterms.source.startPage | --- | |
dcterms.source.issn | 0927-538X | |
dcterms.source.title | Pacific-Basin Finance Journal | |
curtin.department | School of Accounting | |
curtin.accessStatus | Open access |