Determinants Of Ceo Compensation : The Case Of Vietnamese Listed Enterprises
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Determinants of CEO compensation: The case of Vietnamese listed enterprises
Student: TUAN ANH DAO
Chapter I: Introduction
1.1. Background of the study
The question of whether CEOs earn their pay has been created widely sound debates and attracted comprehensive attention from investors, employment economists, financial economists, as well as unfavorably criticized by the public at large (Conyon, 2006; Larker and Tayan, 2011). The debates on executive compensation in general, and on Chief Executive Officers (CEOs) compensation in particular have been passed for years and agglomerated a multitudinous amount of studies (Devers et al., 2007). Criticisms from the public and heated debates from the academics began from the 1990s when executive compensation soared higher than company profitability (Bedchuzck and Fried, 2004). This led the popular press to claim that executive compensation was not correlated to firm performance (Tosi et al., 2000). As a result, one of the most impetuous questions posed out that whether executive pay had been associated authentically with firm performance or not while the empirical executive remuneration studies revealed that firm performance hardly ever exceeded 50 percent in determining top executive compensation, and pay-for-performance sensitivity was so weak (Grabke-Rundell and Gomez-Mejia, 2002).
In executive compensation researches, agency theory is employed as a standard approach to executive compensation research