Remuneration Logics: How Large U.S. Firms Justify Ceo Pay (2010)
PublisherUniversity of Canterbury. Department of Accounting and Information Systems
Purpose: The legitimacy of CEO pay in large U.S. firms has been repeatedly challenged in first decade of the 21st century. However, increases in CEO pay have continued to outpace corresponding changes in firm size and performance. This paper studies how large U.S. firms employ remuneration logics to legitimise CEO pay. Design/methodology/approach: Content analysis is used to identify 13 remuneration logics used in the 1998 and 2007 proxy statements from the largest 50 U.S. firms as well as 18 codes of practice issued between 1994 and 2007. Findings: The remuneration policies of U.S. firms have become increasingly homogenous over time. In 2007, all firms studied used the human resources, market and pay-for-performance logics to justify CEO pay. While firms use the remuneration logics to strategically manage their legitimacy, coercive and normative pressures are driving firms towards uniformity in their remuneration policies. Originality/value: Legitimacy and institutional theory are used to understand and explain organisational discourse on executive remuneration.
CitationCrombie, N.A., Alam, S., Tan, V. (2010) Remuneration Logics: How Large U.S. Firms Justify Ceo Pay. Christchurch, New Zealand: 2010 AFAANZ Conference, 4-6 Jul 2010.
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Keywordscorporate governance; executive remuneration; legitimacy theory; institutional theory
ANZSRC Fields of Research14 - Economics::1402 - Applied Economics::140211 - Labour Economics
15 - Commerce, Management, Tourism and Services::1503 - Business and Management::150303 - Corporate Governance and Stakeholder Engagement
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