International differences in executive compensation: Geographical and cultural analysis

dc.contributorAalto-yliopistofi
dc.contributorAalto Universityen
dc.contributor.authorHäsä, Anni
dc.contributor.departmentLaskentatoimen laitosfi
dc.contributor.departmentDepartment of Accountingen
dc.contributor.schoolKauppakorkeakoulufi
dc.contributor.schoolSchool of Businessen
dc.date.accessioned2014-01-24T09:23:50Z
dc.date.available2014-01-24T09:23:50Z
dc.date.dateaccepted2013-12-03
dc.date.issued2013
dc.description.abstractThis 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.ethesisid13448
dc.format.extent102
dc.identifier.urihttps://aaltodoc.aalto.fi/handle/123456789/12175
dc.identifier.urnURN:NBN:fi:aalto-201401281224
dc.language.isoenen
dc.locationP1 Ifi
dc.programme.majorAccountingen
dc.programme.majorLaskentatoimifi
dc.subject.heleconlaskentatoimi
dc.subject.heleconaccounting
dc.subject.heleconjohtaminen
dc.subject.heleconmanagement
dc.subject.heleconjohtajat
dc.subject.heleconmanagers
dc.subject.heleconpalkkiot
dc.subject.heleconremuneration
dc.subject.heleconpalkka
dc.subject.heleconpay
dc.subject.heleconkansainvälinen
dc.subject.heleconinternational
dc.subject.heleconaluetutkimus
dc.subject.heleconregional research
dc.subject.helecontalousmaantiede
dc.subject.heleconeconomic geography
dc.subject.keywordexecutive compensation
dc.subject.keywordjohdon palkitseminen
dc.subject.keywordinternational executive compensation
dc.subject.keywordkansainvälinen johdon palkitseminen
dc.subject.keywordculture
dc.subject.keywordkulttuuri
dc.subject.keywordgeographical distance
dc.subject.keywordmaantieteellinen etäisyys
dc.titleInternational differences in executive compensation: Geographical and cultural analysisen
dc.typeG2 Pro gradu, diplomityöfi
dc.type.dcmitypetexten
dc.type.ontasotMaster's thesisen
dc.type.ontasotPro gradu tutkielmafi
local.aalto.idthes13448
local.aalto.openaccessno
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