Comparison of executive compensation practices at Nordic and US markets: a mini-review article based on empirical evidence

  • Ummeh Habiba Faria Benteh Rahman Department of International Business, Faculty of Economics and Management, Norwegian University of Science and Technology, Norway
Keywords: Compensation practices, Remuneration package, Pay structure determinants, US pay practices, Nordic pay practices

Abstract

This paper examines the compensation package of the CEO of both the Nordic and US markets and their roles in the organization. The paper contains the comparison between the compensation package of Nordic and US CEOs along with the harmony of the determinants. The work pattern and compensation are different in these two markets, certainly. It has been a big influence in the organization or working places to provide the most desired efforts on the particular or assigned responsibilities. This study is based on a systematic review of literatures, empirical evidences and surveys extracted from 23 articles of the previous studies on the compensation packages of CEO of both Nordic and US markets. The paper will be discussing about the chief executive body in the organization, the compensation design along with their compensation package system, discussing about the theories and determinants’ differences of their compensation practices and how this package is designed in both the Nordic and US markets. The difference between these two markets will be elaborately discussed and following by the author’s own discussion. The paper will end by providing a valid conclusion about the whole study.

Downloads

Download data is not yet available.

References

Baker, G.P., Jensen, M.C. & Murphy, K.J. (1988). Compensation and incentives: Practice vs. theory. The journal of Finance. 43(3), 593-616.

Balkin, D.B. (2008). Explaining high US CEO pay in a global context: An institutional perspective. In Gomez-Mejia, L. & Werner, S. (Eds.), Global compensation: Foundations and perspectives. London: Routledge

Banghøj, J.M., Gabrielsen, G., Petersen, C. & Plenbor, T. (2010). Determinants of executive compensation in privately held firms. Accounting & Finance. 50(3), 481-510.

Bebchuk, L.A. & Fried, J.M. (2003). Executive compensation as an agency problem. Journal of economic perspectives. 17(3), 71-92.

Bebchuk, L. A. & Fried, J.M. (2005). Pay without performance: Overview of the issues. Journal of applied corporate finance. 17(4), 8-23.

Conyon, M.J. & He, L. (2004). Compensation committees and CEO compensation incentives in US entrepreneurial firms. Journal of Management Accounting Research. 16(1), 35-56.

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.

Core, J.E., Guay, W.R. & Thompson, R.S. (2005). Is US CEO compensation inefficient pay without performance. Mich. L. Rev. 103 (6), 1142 - 1185.

Eriksson, T. (2000). What Determines Managers' Pay?: Evidence from Denmark. Long Range Planning. 33(4,: 544-559.

Fernandes, N., Ferreira, M.A., Matos, P. & Murphy, K.J. (2009). The pay divide:(Why) are US top executives paid more. Finance Working Paper No.225, University of Southern California.

Gupta, N.D., Smith, N. & Verner, M. (2008). The impact of Nordic countries’ family friendly policies on employment, wages, and children. Review of Economics of the Household. 6(1), 65-89.

Kaplan, S.N. (2008). Are US CEOs Overpaid? Academy of Management Perspectives. 22(2), 5-20.

Magnan, M.L., St-Onge, S. & Thorne, L. (1995). A comparative analysis of the determinants of executive compensation between Canadian and US firms. Relations Industrielles/Industrial Relations. 50(2), 297-319.

Mahoney, T.A. (1989). Multiple pay contingencies: Strategic design of compensation. Human Resource Management. 28(3), 337-347.

Mangel, R. & Singh, H. (1993). Ownership structure, board relationships and CEO compensation in large US corporations. Accounting and Business Research. 23(sup1), 339-350.

Men, L.R. (2012). CEO credibility, perceived organizational reputation, and employee engagement. Public Relations Review. 38(1), 171-173.

Oxelheim, L. & Clarkson, K. (2015). Cronyism and the determinants of chairman compensation. Journal of business ethics. 131(1), 69-87.

Oxelheim, L. & Randøy, T. (2005). The Anglo-American financial influence on CEO compensation in non-Anglo-American firms. Journal of International Business Studies. 36(4), 470-483.

Oxelheim, L. & Randøy, T. (2010). European Corporate Governance Guidelines and CEO Pay-The Case of Norway and Sweden.

Randøy, T. & Nielsen, J. (2002). Company performance, corporate governance, and CEO compensation in Norway and Sweden. Journal of Management and Governance. 6(1), 57-81.

Talley, E.L. & Johnsen, G. (2004). Corporate governance, executive compensation and securities litigation. USC Law School, Olin Research Paper (04-7).

Thomas, R.S. (2008). International executive pay: Current practices and future trends.

Thomsen, S. & Conyon, M. (2012). Corporate governance: Mechanisms and systems, London: McGraw Hill.

Tranfield, D., Denyer, D. & Smart, P. (2003). Towards a methodology for developing evidence‐informed management knowledge by means of systematic review. British journal of management. 14(3), 207-222.

Published
2019-08-31
How to Cite
Rahman, U. H. F. B. (2019). Comparison of executive compensation practices at Nordic and US markets: a mini-review article based on empirical evidence. Jurnal Perspektif Pembiayaan Dan Pembangunan Daerah, 7(1), 29 - 36. https://doi.org/10.22437/ppd.v7i1.7533