{"title":"Evidence from 1992 to 2019 on the dynamics of managerial authority and CEO remuneration during company crises","authors":"Chin Tae Zan","doi":"10.53384/inbe.101350943.2779.1862003510","DOIUrl":null,"url":null,"abstract":"We investigate the dynamics of two governance constructs, management influence over the board of directors and CEO remuneration, in enterprises in crisis from 1992 to 2019. Data reveal a strong trend of improving governance over time, which confounds the conclusion concerning the impact of distress on governance. Using a bias-corrected matching estimator to control for secular trends, we find that distressed businesses cut management board appointments and CEO compensation, deepen managerial incentive alignment, and increase CEO turnover. The performance-related component of CEO remuneration accounts for the majority of changes in CEO compensation in troubled businesses, which is consistent with the \"shareholder value\" perspective on CEO compensation.","PeriodicalId":408151,"journal":{"name":"Industrielle Beziehungen. Zeitschrift für Arbeit, Organisation und Management","volume":"192 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2022-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Industrielle Beziehungen. Zeitschrift für Arbeit, Organisation und Management","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.53384/inbe.101350943.2779.1862003510","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
We investigate the dynamics of two governance constructs, management influence over the board of directors and CEO remuneration, in enterprises in crisis from 1992 to 2019. Data reveal a strong trend of improving governance over time, which confounds the conclusion concerning the impact of distress on governance. Using a bias-corrected matching estimator to control for secular trends, we find that distressed businesses cut management board appointments and CEO compensation, deepen managerial incentive alignment, and increase CEO turnover. The performance-related component of CEO remuneration accounts for the majority of changes in CEO compensation in troubled businesses, which is consistent with the "shareholder value" perspective on CEO compensation.
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