haku: @journal_id 1686 / yhteensä: 96
viite: 5 / 96
| Tekijä: | Liu, L. S. Stark, A. W |
| Otsikko: | Relative performance evaluation in board cash compensation: UK empirical evidence |
| Lehti: | British Accounting Review
2009 : MAR, VOL. 41:1 p. 21-30 |
| Asiasana: | United Kingdom executive remuneration performance measurement reward systems performance appraisal |
| Kieli: | eng |
| Tiivistelmä: | The study examines if evidence of the implicit use of relative performance evaluation (hereafter as: RPE) can be found in the cash compensation of boards of directors for 169 UK non-financial listed companies existed from 1971 to 1998. Initially, the paper estimates individual firm time series regressions of the change in board cash compensation against measures of firm and peer group performance. The measures used are annual cash stock market returns and pre-tax accounting earnings. Industry value-weighted average cash stock market returns and industry value-weighted average pre-tax accounting earnings are used as the measures of firm performance. Subsequently, the data is analyzed as a balanced panel. The results show that board cash compensation is positively related to accounting earnings and negatively associated with peer group pre-tax accounting earnings. Some evidence suggests board cash compensation being related to firm stock market returns but none suggests it being related to peer group market returns. Thus, the presence of RPE based on accounting earnings in the design of UK board compensation exists, with the cash compensation of boards of directors implicitly protected from industry uncertainties. |
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