Leverage and Executive Pay-Performance of the Indonesian Family Firms  

Oleh:

Kunaifi, Aang ; Nareswari, Ninditya ; Rizyad, Byz

Jenis: Article from Proceeding
Dalam koleksi: International Conference on Global Innovation and Trends in Economy INCOGITE 2020 Vol 3 Nov 2020, page 41-47.
Topik: Leverage; Executive compensation; Pay performance; Firm performance; Family firm
Fulltext: 4_Leverage and Executive Pay-Performance of The Indonesian Family Firms.pdf (272.8KB)

Isi artikel

This study aims to investigate the impact of firm performance on executive compensation. This study also examines the moderating role of leverage on the firm performance and executive pay-performance relationship. Used data panel regression as a method, this study showed that firm performance had a positive impact on executive compensation. This paper also showed that leverage weakens the pay-performance relationship. These results indicate that creditors prefer to assess family firm performance based on the risk rather than accounting performance. Higher leverage illustrated a high risk. The firm with high risk indicated poor executive performance. As a result, compensation will be lower.

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