The Influence of Corporate Governance, Size, Growth and Performance to Executive Compensation (Study of Indonesian Capital Market)
DOI:
https://doi.org/10.26740/jaj.v9n1.p65-81Keywords:
executive compensation, company size, growth, performance, corporate governanceAbstract
AbstractThe purposes of this study are as follows: (1) to determine whether executive compensation policies influenced by corporate governance practices, (2) to determine whether executive compensation policy are influenced by the size, growth and performance. This research have done in 2014 with the observation period from 2009 to 2011. The methods of collecting data in this research through the observations of the financial statements of companies listed on the Indonesian Stock Exchange. This study used inferential statistical methods in analyzing the data that is processed by regression analysis. The results showed performance and size have the positive effect significantly on the executive compensation.
Abstrak
Tujuan dari penelitian ini adalah sebagai berikut: (1) menentukan apakah kebijakan kompensasi eksekutif dipengaruhi oleh corporate governance (2) untuk menentukan apakah kebijakan kompensasi eksekutif dipengaruhi oleh ukuran, pertumbuhan dan kinerja. Penelitian ini telah dilakukan pada tahun 2014 dengan periode pengamatan dari tahun 2009 sampai 2011. Metode pengumpulan data dalam penelitian ini melalui pengamatan terhadap laporan keuangan perusahaan yang tercatat di Bursa Efek Indonesia. Penelitian ini menggunakan metode statistik inferensial dalam menganalisis data yang diolah dengan analisis regresi. Hasilnya menunjukkan kinerja dan ukuran memiliki efek positif secara signifikan terhadap kompensasi eksekutif.
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https://doi.org/10.2307/2490920
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DOI: https://doi.org/10.3386/w9068
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DOI:https://doi.org/10.1257/089533003769204362
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Bunkanwanicha, P., Gupta, J., & Rokhim, R. (2008). Debt and entrenchment: Evidence from Thailand and Indonesia. European Journal of Operational Research, 185(3), 1578-1595.
https://doi.org/10.1016/j.ejor.2006.08.025
Chalmers, K., Koh, P. S., & Stapledon, G. (2006). The determinants of CEO compensation: Rent extraction or labour demand?. The british accounting review, 38(3), 259-275.
https://doi.org/10.1016/j.bar.2006.01.003
Claessens, S., Djankov, S., & Lang, L. H. (2000). The separation of ownership and control in East Asian corporations. Journal of financial Economics, 58(1), 81-112.https://doi.org/10.1016/s0304-405x(00)00067-2
Claessens, S., & Fan, J. P. (2003). Corporate governance in Asia: A survey.
https://doi.org/10.2139/ssrn.386481
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Claessens, S., Djankov, S., Fan, J. P., & Lang, L. H. (1999). Expropriation of minority shareholders: Evidence from East Asia (pp. 461-498). Washington, DC: World Bank.
Claessens, S., Djankov, S., & Lang, L. H. (2000). The separation of ownership and control in East Asian corporations. Journal of financial Economics, 58(1), 81-112.
https://doi.org/10.1016/s0304-405x(00)00067-2
Claessens, S., Djankov, S., Fan, J. P., & Lang, L. H. (2002). Disentangling the incentive and entrenchment effects of large shareholdings. The journal of finance, 57(6), 2741-2771.
https://doi.org/10.1111/1540-6261.00511
Thomas, C. (2004). Theories of Corporate Governance, The Philosophical Found-ation of Corporate Governance. London and New York: Routledge, ISBN X, 41532307.
Conyon, M. J., & Murphy, K. J. (2000). The prince and the pauper? CEO pay in the United States and United Kingdom. The Economic Journal, 110(467), 640-671.https://doi.org/10.1111/1468-0297.00577
Copeland, T. E., Weston, J. F., & Shastri, K. (2005). Financial theory and corporate policy. Paerson Addison Wesley. Fourth Ed. USA.
Core, J. E., Holthausen, R. W., & Larcker, D. F. (1999). Corporate governance, chief executive officer compensation, and firm performance. Journal of financial economics, 51(3), 371-406.
https://doi.org/10.1016/s0304-405x(98)00058-0
Cyert, R. M., Kang, S. H., & Kumar, P. (2002). Corporate governance, takeovers, and top-management compensation: Theory and evidence. Management Science, 48(4), 453-469. https://doi.org/10.1287/mnsc.48.4.453.205
Darmadi. (2011). Determinant of Execuitve Compensation. Indonesian Journal of Accounting Research.
Du, J., & Dai, Y. (2005). Ultimate corporate ownership structures and capital structures: Evidence from East Asian economies. Corporate Governance: An International Review, 13(1), 60-71.
https://doi.org/10.1111/j.1467-8683.2005.00403.x
Elloumi, F., & Gueyié, J. P. (2001). CEO compensation, IOS and the role of corporate governance. Corporate Governance: The international journal of business in society, 1(2), 23-33.
https://doi.org/10.1108/eum0000000005487
Faccio, M., & Lang, L. H. (2002). The ultimate ownership of Western European corporations. Journal of financial economics, 65(3), 365-395.
https://doi.org/10.1016/s0304-405x(02)00146-0
Fama, E. F. (1980). Agency Problems and the Theory of the Firm. Journal of political economy, 88(2), 288-307.
https://doi.org/10.1086/260866
Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The journal of law and Economics, 26(2), 301-325.
https://doi.org/10.1086/467037
Fernandes, N. (2008). EC: Board compensation and firm performance: The role of œindependent board members. Journal of imultinational financial management, 18(1), 30-44.
https://doi.org/10.1016/j.mulfin.2007.02.003
Firth, M., Fung, P. M., & Rui, O. M. (2006). Corporate performance and CEO compensation in China. Journal of Corporate Finance, 12(4), 693-714.
https://doi.org/10.1016/j.jcorpfin.2005.03.002
Gaver, J. J., & Gaver, K. M. (1993). Additional evidence on the association between the investment opportunity set and corporate financing, dividend, and compensation policies. Journal of Accounting and economics, 16(1-3), 125-160.
https://doi.org/10.1016/0165-4101(93)90007-3
Gaver, J. J., & Gaver, K. M. (1995). Compensation policy and the investment opportunity set. Financial management, 19-32.https://doi.org/10.2307/3665874
Goldberg G.L & Todd L.Idson. 1995. Executive Compensation and Agency Effects. The Financial Review, Vol 30. No. 2 May. Pp. 313-335
https://doi.org/10.1111/j.1540-6288.1995.tb00835.x
Gomez-Mejia, L. R., Tosi, H., & Hinkin, T. (1987). Managerial control, performance, and executive compensation. Academy of Management journal, 30(1), 51-70.
https://doi.org/10.2307/255895
Gordon E. A., Henry, E., & Palia, D. (2004). Related Party Transactions: Associations with Corporate Governance and Firm Value. Dipresentasikan pada 2004 American Accounting Association Annual Meeting dan 2004 European Finance Association Annual Conference. Download from: http://www. nd. edu/~carecob/workshops/Gordon.pdf
Samuael, G. R. (1997). The Role of Risk in Executive Compensation. Journal of Management. Diakses dari http://findarticle.com.
Gregg,P., Jewell, S., & Tonks, I. (2005). Executive Pay and Performance in the UK 1994-2002. CMPO Working Paper No. 05/122 ISSN 1473-625X
Gueyle & Elloumi. (2001). CEO compensation, IOS and Role of Corporate Governance. Indonesian Institute of Corporate Directorships (IICD). 2004. http://info @iicd.co.id.Jakarta
Baek, J. S., Kang, J. K., & Park, K. S. (2004). Corporate governance and firm value: Evidence from the Korean financial crisis. Journal of Financial economics, 71(2), 265-313.
https://doi.org/10.1016/s0304-405x(03)00167-3
Jensen, M. C. (2003). A theory of the firm: governance, residual claims, and organizational forms. Harvard University Press.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of financial economics, 3(4), 305-360.
https://doi.org/10.1016/0304-405x(76)90026-x
Jensen C.M. dan Murphy K.J. (1990). Performance Pay and Top-Management Incentives. Journal of Political Economy, April, vol , no. 2, pp. 225-264.
Jensen C.M., Kevin J.Murphy, Erick G.Wruck. (2004). Remuneration: Where Weve Been, How We Got to Here, What are the Problems, and How to Fix Them. Harvard. NOM Working Paper No. 04-28; ECGI-Finance Working Paper No. 44/2004
Jensen, M. C., & Murphy, K. J. (1990). Performance pay and top-management incentives. Journal of political economy, 98(2), 225-264.
https://doi.org/10.1086/261677
Kato, T., & Long, C. (2004). Executive compensation, firm performance, and state ownership in China: evidence from new panel data. The William Davidson Institute Working Paper Number 690.
Kato, T., & Kubo, K. (2006). CEO compensation and firm performance in Japan: Evidence from new panel data on individual CEO pay. Journal of the Japanese and International Economies, 20(1), 1-19.
https://doi.org/10.1016/j.jjie.2004.05.003
Kato Takao, Woochan Kim, & Ju Ho Lee. (2004). Executive Compensation, Firm Performance, and Chaebols in Korea: Evidence From New Panel Data. The William Davidson Institute Working Paper.
Khanna, T., & Palepu, K. (1997). Why focused strategies may be wrong for emerging markets. Harvard business review, 75(4), 41-48.
Khana Tarun and Krishna Palepu. 1999. Emerging Market Business Groups, Foreign Investors, and Corporate Governance. National Bureau of Economics Research Working Paper. http://www.nber.org/papers/w6955.
L Shleifer, A., La Porta, R., & Lopez-De-Silanes, F. (1999). Corporate ownership around the world. Journal of Finance, 54(2), 471-517.
https://doi.org/10.1111/0022-1082.00115
Rafael, L. P., Lopez-de-Silanes, F., Sjleifer, A & Vishny, R. (2002). Investor Protection and Corporate Governance.
Lambert, R. A., & Larcker, D. F. (1985). Golden parachutes, executive decision-making, and shareholder wealth. Journal of Accounting and Economics, 7(1), 179-203.https://doi.org/10.1016/0165-4101(85)90036-9
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2017-10-31
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Ulupui, I. G. K. A., & Dwija Putri, I. G. A. M. A. (2017). The Influence of Corporate Governance, Size, Growth and Performance to Executive Compensation (Study of Indonesian Capital Market). AKRUAL: Jurnal Akuntansi, 9(1), 65–81. https://doi.org/10.26740/jaj.v9n1.p65-81
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