Differences in the use of CEO pay components in EU countries: A comparative study

dc.contributorAalto-yliopistofi
dc.contributorAalto Universityen
dc.contributor.authorBergman, Maria
dc.contributor.departmentLaskentatoimen laitosfi
dc.contributor.departmentDepartment of Accountingen
dc.contributor.schoolKauppakorkeakoulufi
dc.contributor.schoolSchool of Businessen
dc.date.accessioned2016-01-19T09:33:16Z
dc.date.available2016-01-19T09:33:16Z
dc.date.dateaccepted2015-12-10
dc.date.issued2015
dc.description.abstractThis is a comparative study on the differences in the use of CEO pay components in European Union countries. We will examine nine different countries across the European Union during a ten-year time period of 2005-2014. We aim to determine, whether the use of different pay components has been harmonized during our time period or if national differences can still be detected. In addition, we aim to find out, whether the corporate governance system the country belongs to and its different characteristics could explain differences in the use of CEO pay components. In this research, we aim to determine the relative shares of fixed pay, short-term incentives, long-term incentives and equity-based pay out of CEO compensation. We will compare the relative shares of our nine countries and aim to find systematic differences in how the com-ponents are used. Also possible harmonization is studied. In addition to this, we will deter-mine if countries belonging to the same corporate governance system use the different pay components similarly. We will examine, if corporate governance systems affect how perfor-mance-dependent CEO compensation is in each country. Also, we aim to determine if the dif-ferences in the time horizon of economic relationships of each corporate governance system are reflected on the prominence of short-or long-term pay. In addition, we will examine if the importance of national stock markets in each corporate governance system affects, whether the CEOs are paid in cash or by granting them equity. In our research, we found systematic differences in how EU countries use different CEO pay components. We found that also harmonization has taken place, but it has diminished the differences, rather than eliminated them altogether. The differences can be found not only between the different corporate governance systems, but also between countries belonging to the same system. In general, we found a link between the corporate governance systems and the relative share of fixed pay. However, a link between the corporate governance systems and the choice between short-and long-term pay was not detected. Thus, we found the time horizon of economic relationships not to dictate whether the countries use short-or long-term incentives. However, we did find the importance of national stock markets to affect the prom-inence of equity-based pay: the higher the importance of stock markets, the higher the rela-tive share of equity-based pay.en
dc.ethesisid14228
dc.format.extent88
dc.identifier.urihttps://aaltodoc.aalto.fi/handle/123456789/19375
dc.identifier.urnURN:NBN:fi:aalto-201601191023
dc.language.isoenen
dc.locationP1 I
dc.programme.majorAccountingen
dc.programme.majorLaskentatoimifi
dc.subject.heleconlaskentatoimi
dc.subject.heleconaccounting
dc.subject.heleconjohtajat
dc.subject.heleconmanagers
dc.subject.heleconpalkka
dc.subject.heleconpay
dc.subject.heleconcorporate governance
dc.subject.heleconcorporate governance
dc.subject.heleconEU
dc.subject.heleconEU
dc.subject.keywordcorporate governance
dc.subject.keywordcorporate governance systems
dc.subject.keywordexecutive compensation
dc.subject.keywordpay components
dc.subject.keywordconvergence
dc.subject.keywordEU
dc.titleDifferences in the use of CEO pay components in EU countries: A comparative studyen
dc.typeG2 Pro gradu, diplomityöfi
dc.type.dcmitypetexten
dc.type.ontasotMaster's thesisen
dc.type.ontasotPro gradu tutkielmafi
local.aalto.idthes14228
local.aalto.openaccessno
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