International differences in executive compensation: Geographical and cultural analysis

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en Häsä, Anni 2014-01-24T09:23:50Z 2014-01-24T09:23:50Z 2013
dc.description.abstract This paper provides an overview of the main theoretical elements and empirical underpinnings of executive compensation system designs. It is argued that the components affecting CEO pay studied up to today including e.g. company size, performance, industry, and ownership structure are not enough to explain the differences observed in international executive pay. Thus, the analysis is expanded to take into consideration also geographical and cultural influences. In this study geographical distance is measured at the continent level whereas Hofstede's cultural country scores are used to proxy cultural aspects. The study is realized as archival research with a sample of 120 observations from 10 countries and 6 industries. The countries included are Australia, Canada, Finland, France, Germany, Portugal, Spain, Sweden, The United Kingdom and The United States. The industries included are energy, telecom & information technology, machinery, commercial, transport, and chemicals & pharmaceuticals. The compensation data was gathered from the webpages of the companies and the company specific control data from the Orbis database. The data was analysed with statistical methods using SPSS. The results are surprising by nature and challenge the sole reliance on agency theory and agency costs of debt theory in the field of executive compensation: the study indicates that the rational explanations such as company size, profitability, industry, and capital structure often offered to explain the determination of executive pay actually explain only a very small percentage of the international differences observed in executive compensation practices and in the use of share-based pay systems. On the contrary, the results suggest executive compensation relies very much on geographical and cultural considerations and as a consequence it seems there is no universal fit-for-all compensation practice that can be developed. Thus, this study gives indication against the recent suggestions towards a convergence of executive compensation. en
dc.format.extent 102
dc.language.iso en en
dc.title International differences in executive compensation: Geographical and cultural analysis en
dc.type G2 Pro gradu, diplomityö fi Kauppakorkeakoulu fi School of Business en
dc.contributor.department Laskentatoimen laitos fi
dc.contributor.department Department of Accounting en
dc.subject.keyword executive compensation
dc.subject.keyword johdon palkitseminen
dc.subject.keyword international executive compensation
dc.subject.keyword kansainvälinen johdon palkitseminen
dc.subject.keyword culture
dc.subject.keyword kulttuuri
dc.subject.keyword geographical distance
dc.subject.keyword maantieteellinen etäisyys
dc.identifier.urn URN:NBN:fi:aalto-201401281224
dc.type.dcmitype text en
dc.programme.major Accounting en
dc.programme.major Laskentatoimi fi
dc.type.ontasot Master's thesis en
dc.type.ontasot Pro gradu tutkielma fi
dc.subject.helecon laskentatoimi
dc.subject.helecon accounting
dc.subject.helecon johtaminen
dc.subject.helecon management
dc.subject.helecon johtajat
dc.subject.helecon managers
dc.subject.helecon palkkiot
dc.subject.helecon remuneration
dc.subject.helecon palkka
dc.subject.helecon pay
dc.subject.helecon kansainvälinen
dc.subject.helecon international
dc.subject.helecon aluetutkimus
dc.subject.helecon regional research
dc.subject.helecon talousmaantiede
dc.subject.helecon economic geography
dc.ethesisid 13448 2013-12-03
dc.location P1 I fi

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