Curtin University Homepage
  • Library
  • Help
    • Admin

    espace - Curtin’s institutional repository

    JavaScript is disabled for your browser. Some features of this site may not work without it.
    View Item 
    • espace Home
    • espace
    • Curtin Research Publications
    • View Item
    • espace Home
    • espace
    • Curtin Research Publications
    • View Item

    Incentive pay for non-executive directors: The direct and interaction effects on firm performance

    Access Status
    Fulltext not available
    Authors
    Adithipyangkul, Pattarin
    Leung, T.
    Date
    2017
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Adithipyangkul, P. and Leung, T. 2017. Incentive pay for non-executive directors: The direct and interaction effects on firm performance. Asia Pacific Journal of Management. Online first (not yet assigned to a volume and issue): pp. 1-22.
    Source Title
    Asia Pacific Journal of Management
    DOI
    10.1007/s10490-017-9534-z
    ISSN
    0217-4561
    School
    School of Accounting
    URI
    http://hdl.handle.net/20.500.11937/63366
    Collection
    • Curtin Research Publications
    Abstract

    © 2017 Springer Science+Business Media, LLC To improve corporate governance and firm performance, institutional investors and influential activists in the US recommend the use of incentive pay for non-executive directors. Policy makers in the UK and Australia, however, recommend against it. Motivated by stark contrast in the recommendations from these Anglo-Saxon countries, this paper investigates the impacts of incentive pay for non-executive directors on firm performance. The findings based on data from 178 listed Australian companies support both recommendations. Firm performance tends to be better when no incentive or high-power incentives are offered to non-executive directors than when low-power incentives are offered. This paper also investigates how incentive pay interacts with monitoring by large shareholders and debtholders to influence firm performance. This paper shows that large shareholder monitoring interacts negatively while debtholder monitoring interacts positively with incentive pay for non-executive directors to affect firm performance. Overall, the findings suggest that governance mechanisms recommended by agency theorists such as performance-contingent pay and monitoring can backfire if they are not designed properly. Both the direct and interaction effects should be considered when practitioners design corporate governance systems.

    Related items

    Showing items related by title, author, creator and subject.

    • The effect of board composition on firm performance in Indonesia
      Prabowo, Muhammad Agung (2010)
      The study investigates the effect of the compositions of board of directors on firm performance in Indonesia. This country offers a specific institutional environment, which provides a natural setting to further examine ...
    • Corporate performance criteria in Australia and Thailand : individual tasks and roles of company directors
      Boriboonsate, Patchareewan (2011)
      Weaknesses in corporate governance systems in many countries have caused consequences within a country and across borders; they have stirred the need for corporate governance reform in many parts of the world. At the top ...
    • Family directors, independent directors, remuneration committee and executive remuneration in Malaysian listed family firms
      Jong, Ling ; Ho, P. (2019)
      © 2019, Emerald Publishing Limited. Purpose: The purpose of this paper is to examine the influence of family directors and independent directors on executive remuneration of listed family firms in Malaysia, and their ...
    Advanced search

    Browse

    Communities & CollectionsIssue DateAuthorTitleSubjectDocument TypeThis CollectionIssue DateAuthorTitleSubjectDocument Type

    My Account

    Admin

    Statistics

    Most Popular ItemsStatistics by CountryMost Popular Authors

    Follow Curtin

    • 
    • 
    • 
    • 
    • 

    CRICOS Provider Code: 00301JABN: 99 143 842 569TEQSA: PRV12158

    Copyright | Disclaimer | Privacy statement | Accessibility

    Curtin would like to pay respect to the Aboriginal and Torres Strait Islander members of our community by acknowledging the traditional owners of the land on which the Perth campus is located, the Whadjuk people of the Nyungar Nation; and on our Kalgoorlie campus, the Wongutha people of the North-Eastern Goldfields.