Executive director pay, corporate governance and performance in South Africa: a simultaneous equation approach
Executive director pay, corporate governance and performance in South Africa: a simultaneous equation approach
This paper investigates the association between executive compensation and corporate performance using a sample of 169 South African listed firms from 2002 to 2007. It uniquely utilises a comprehensive set of corporate governance mechanisms within a three-stage least squares (3SLS) simultaneous equation framework. Results based on estimating a conventional single equation model indicate that the executive pay and performance sensitivity is relatively weak, whereas those based on estimating a 3SLS model generally suggest improved executive pay and performance sensitivity. Our findings highlight the need for future research to control for possible simultaneous interdependencies when estimating the executive pay and performance link. The findings are generally robust across a raft of econometric models that control for different types of endogeneities, pay and performance proxies.
University of Southampton
Ntim, Collins G.
1f344edc-8005-4e96-8972-d56c4dade46b
Lindop, Sarah
01326442-043b-4924-90dc-fc43332d778a
Osei, Kofi A.
c2f5f5a9-a531-4db1-a59a-7561dcf307e8
Thomas, Dennis A.
094e07cf-9d77-4d26-96f1-89e88be840c7
12 January 2010
Ntim, Collins G.
1f344edc-8005-4e96-8972-d56c4dade46b
Lindop, Sarah
01326442-043b-4924-90dc-fc43332d778a
Osei, Kofi A.
c2f5f5a9-a531-4db1-a59a-7561dcf307e8
Thomas, Dennis A.
094e07cf-9d77-4d26-96f1-89e88be840c7
Ntim, Collins G., Lindop, Sarah, Osei, Kofi A. and Thomas, Dennis A.
(2010)
Executive director pay, corporate governance and performance in South Africa: a simultaneous equation approach
Southampton, GB.
University of Southampton
Record type:
Monograph
(Working Paper)
Abstract
This paper investigates the association between executive compensation and corporate performance using a sample of 169 South African listed firms from 2002 to 2007. It uniquely utilises a comprehensive set of corporate governance mechanisms within a three-stage least squares (3SLS) simultaneous equation framework. Results based on estimating a conventional single equation model indicate that the executive pay and performance sensitivity is relatively weak, whereas those based on estimating a 3SLS model generally suggest improved executive pay and performance sensitivity. Our findings highlight the need for future research to control for possible simultaneous interdependencies when estimating the executive pay and performance link. The findings are generally robust across a raft of econometric models that control for different types of endogeneities, pay and performance proxies.
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More information
Published date: 12 January 2010
Organisations:
Centre of Excellence in Decision, Analytics & Risk Research, Accounting
Identifiers
Local EPrints ID: 343639
URI: http://eprints.soton.ac.uk/id/eprint/343639
PURE UUID: 569067b8-2f5e-4b85-957c-df9949d3c6ef
Catalogue record
Date deposited: 09 Oct 2012 15:36
Last modified: 11 Dec 2021 02:28
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Contributors
Author:
Sarah Lindop
Author:
Kofi A. Osei
Author:
Dennis A. Thomas
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