3,094
Views
11
CrossRef citations to date
0
Altmetric
Research Article

Inside the family firms: The impact of family and institutional ownership on executive remuneration

ORCID Icon & | (Reviewing Editor)
Article: 1432095 | Received 19 Jul 2017, Accepted 18 Jan 2018, Published online: 07 Feb 2018

References

  • Abdul-Rahman, R. (2006). Effective corporate governance (1st ed.). Kuala Lumpur: University Publication Centre, University Teknologi MARA.
  • Abdul-Wahab, E. A., & Abdul-Rahman, R. (2009). Institutional investors and director remuneration: Do political connections matter? Advances in Financial Economics, 13, 139–169.
  • Afza Amran, N. A., & Che-Ahmad, A. (2009). Family business, board dynamics and firm value: Evidence from Malaysia. Journal of Financial Reporting and Accounting, 7(1), 53–74.10.1108/19852510980000641
  • Aggarwal, R., Erel, I., Ferreira, M., & Matos, P. (2011). Does governance travel around the world? Evidence from institutional investors. Journal of Financial Economics, 100(1), 154–181. doi:10.1016/j.jfineco.2010.10.018
  • Aguilera, R. V., & Cuervo-Cazurra, A. (2004). Codes of good governance worldwide: What is the trigger? Organization Studies, 25(3), 415–443. doi: 10.1177/0170840604040669
  • Ahmadjian, C. L., & Robbins, G. E. (2005). A clash of capitalisms: Foreign shareholders and corporate restructuring in 1990s Japan. American Sociological Review, 70(3), 451–471. doi:10.2307/4145390
  • Ali, A., Chen, T.-Y., & Radhakrishnan, S. (2007). Corporate disclosures by family firms. Journal of Accounting and Economics, 44(1-2), 238–286. doi:10.1016/j.jacceco.2007.01.006
  • Almazan, A., Hartzell, J. C., & Starks, L. T. (2005). Active institutional shareholders and costs of monitoring: Evidence from executive compensation. Financial Management, 34(4), 5–34.10.1111/fima.2005.34.issue-4
  • Anderson, R. C., & Reeb, D. M. (2003). Founding-family ownership and firm performance: Evidence from the S&P 500. The Journal of Finance, 58, 1301–1328.10.1111/1540-6261.00567
  • Andres, C. (2008). Large shareholders and firm performance—An empirical examination of founding-family ownership. Journal of Corporate Finance, 14(4), 431–445. doi:10.1016/j.jcorpfin.2008.05.003
  • Anum Mohd Ghazali, N. A. M. (2010). Ownership structure, corporate governance and corporate performance in Malaysia. International Journal of Commerce and Management, 20, 109–119.10.1108/10569211011057245
  • Aswadi Abdul Wahab, E. A., Mat Zain, M. M., James, K., & Haron, H. (2009). Institutional investors, political connection and audit quality in Malaysia. Accounting Research Journal, 22(2), 167–195.10.1108/10309610910987501
  • Bacha, O. I., Zain, S. R. S. M., Rasid, M. E. S. M., & Mohamad, A. (2009). Granting employee stock options (ESOS), market reaction and financial performance. Asian Academy of Management Journal of Accounting & Finance, 5(1), 117–138.
  • Baltagi, B. H. (2005). Econometric analysis of panel data (3rd ed.). England: John Wiley & Sons Ltd.
  • Barontini, R., & Bozzi, S. (2011). Board compensation and ownership structure: Empirical evidence for Italian listed companies. Journal of Management & Governance, 15(1), 59–89. doi:10.1007/s10997-009-9118-5
  • Basu, S., Hwang, L.-S., Mitsudome, T., & Weintrop, J. (2007). Corporate governance, top executive compensation and firm performance in Japan. Pacific-Basin Finance Journal, 15(1), 56–79. doi:10.1016/j.pacfin.2006.05.002
  • Benjamin, S. J., Zain, M. M., & Wahab, E. A. A. (2016). Political connections, institutional investors and dividend payouts in Malaysia. Pacific Accounting Review, 28(2), 135–152.
  • Bhaumik, S. K., & Gregoriou, A. (2010). Family ownership, tunnelling and earnings management: A review of the literature. Journal of Economic Surveys, 24(4), 705–730.10.1111/joes.2010.24.issue-4
  • Cadbury Committee. (1992). The financial aspects of corporate governance. London.
  • Carney, R. W., & Child, T. B. (2013). Changes to the ownership and control of East Asian corporations between 1996 and 2008: The primacy of politics. Journal of Financial Economics, 107(2), 494–513. doi:10.1016/j.jfineco.2012.08.013
  • Carrasco-Hernandez, A., & Sánchez-Marín, G. (2007). The determinants of employee compensation in family firms: Empirical evidence. Family Business Review, 20(3), 215–228. doi:10.1111/j.1741-6248.2007.00096.x
  • Cheung, Y.-L., Stouraitis, A., & Wong, A. W. S. (2005). Ownership concentration and executive compensation in closely held firms: Evidence from Hong Kong. Journal of Empirical Finance, 12(4), 511–532. doi:10.1016/j.jempfin.2004.10.001
  • Chung, R., Firth, M., & Kim, J.-B. (2002). Institutional monitoring and opportunistic earnings management. Journal of Corporate Finance, 8(1), 29–48. doi:10.1016/S0929-1199(01)00039-6
  • Claessens, S., Djankov, S., Fan, J. P. H., & Lang, L. H. P. (2002). Disentangling the incentive and entrenchment effects of large shareholdings. The Journal of Finance, 57, 2741–2771.10.1111/1540-6261.00511
  • Claessens, S., Djankov, S., & Lang, L. H. P. (2000). The separation of ownership and control in East Asian Corporations. Journal of Financial Economics, 58(1–2), 81–112.10.1016/S0304-405X(00)00067-2
  • Conyon, M. J., & Peck, S. I. (1998). Board control, remuneration committees, and top management compensation. Academy of Management Journal, 41(2), 146–157.10.2307/257099
  • 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), 371–406.10.1016/S0304-405X(98)00058-0
  • Cornett, M. M., Marcus, A. J., Saunders, A., & Tehranian, H. (2007). The impact of institutional ownership on corporate operating performance. Journal of Banking & Finance, 31(6), 1771–1794.10.1016/j.jbankfin.2006.08.006
  • Cosh, A., & Hughes, A. (1997). Executive remuneration, executive dismissal and institutional shareholdings. International Journal of Industrial Organization, 15(4), 469–492. doi:10.1016/S0167-7187(96)01031-4
  • Croci, E., Gonenc, H., & Ozkan, N. (2012). CEO compensation, family control, and institutional investors in Continental Europe. Journal of Banking and Finance, 36, 3318–3335.10.1016/j.jbankfin.2012.07.017
  • Cvijanović, D., Dasgupta, A., & Zachariadis, K. E. (2016). Ties That Bind: How Business Connections Affect Mutual Fund Activism. The Journal of Finance, 71(6), 2933–2966. doi:10.1111/jofi.12425
  • DeAngelo, H., & DeAngelo, L. (2000). Controlling stockholders and the disciplinary role of corporate payout policy: A study of the Times Mirror Company. Journal of Financial Economics, 56(2), 153–207. doi:10.1016/S0304-405X(00)00039-8
  • De Cesari, A. D. (2012). Expropriation of minority shareholders and payout policy. The British Accounting Review, 44(4), 207–220. doi:10.1016/j.bar.2012.09.002
  • Dogan, E., & Smyth, R. (2002). Board remuneration, company performance, and ownership concentration. Asean Economic Bulletin, 19(3), 319.10.1355/AE19-3F
  • Dong, M., & Ozkan, A. (2008). Institutional investors and director pay: An empirical study of UK companies. Journal of Multinational Financial Management, 18(1), 16–29. doi:10.1016/j.mulfin.2007.06.001
  • The Economist. (2015). Family firms: To have and to hold. Retrieved from http://www.economist.com/news/special-report/21648171-far-declining-family-firms-will-remain-important-feature-global-capitalism
  • Emerging Markets Committee. (2012). Development and Regulation of Institutional Investors in Emerging Markets. Retrieved from https://www.iosco.org/library/pubdocs/pdf/IOSCOPD384.pdf
  • Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The Journal of Law and Economics, 26(2), 301–325.10.1086/467037
  • Fan, C. W., Tan, J., Guller, E., Garcia, B., & Quek, A. (2011). Asian family business report 2011: Credit Suisse.
  • Fernando, G. D., Schneible, R. A., & Suh, S. (2014). Family firms and institutional investors. Family Business Review, 27(4), 328–345. doi:10.1177/0894486513481474
  • Ferreira, M. A., Massa, M., & Matos, P. (2010). Shareholders at the gate? Institutional investors and cross-border mergers and acquisitions. Review of Financial Studies, 23(2), 601–644. doi:10.2307/40468322
  • Ferreira, M. A., & Matos, P. (2008). The colors of investors’ money: The role of institutional investors around the world. Journal of Financial Economics, 88(3), 499–533. doi:10.1016/j.jfineco.2007.07.003
  • Filatotchev, I., Lien, Y.-C., & Piesse, J. (2005). Corporate governance and performance in publicly listed, family-controlled firms: Evidence from Taiwan. Asia Pacific Journal of Management, 22(3), 257–283.10.1007/s10490-005-3569-2
  • Filatotchev, I., Zhang, X., & Piesse, J. (2011). Multiple agency perspective, family control, and private information abuse in an emerging economy. Asia Pacific Journal of Management, 28, 69–93.10.1007/s10490-010-9220-x
  • Ghosh, C., & Sirmans, C. F. (2005). On REIT CEO compensation: Does board structure matter? The Journal of Real Estate Finance and Economics, 30(4), 397–428. doi:10.1007/s11146-005-7014-6
  • Gillan, S. L., & Starks, L. T. (2003). Corporate governance, corporate ownership, and the role of institutional investors: A global perspective. Journal of Applied Finance, 13(2), 4–22.
  • Gomez-Mejia, L. R., Larraza-Kintana, M., & Makri, M. (2003). The determinants of executive compensation in family-controlled public corporations. Academy of Management Journal, 46(2), 226–237.10.2307/30040616
  • Gomez-Mejia, L. R., Nunez-Nickel, M., & Gutierrez, I. (2001). The role of family ties in agency contracts. Academy of Management Journal, 44(1), 81–95. doi:10.2307/3069338
  • Gregg, P., Jewell, S., & Tonks, I. (2012). Executive pay and performance: Did bankers’ bonuses cause the crisis? International Review of Finance, 12(1), 89–122. doi:10.1111/j.1468-2443.2011.01136.x
  • Greenbury Committee. (1995). Report on directors’ pay. London.
  • Guercio, D. D., & Hawkins, J. (1999). The motivation and impact of pension fund activism. Journal of Financial Economics, 52(3), 293–340. doi:10.1016/S0304-405X(99)00011-2
  • Haid, A., & Yurtoglu, B. B. (2006). Ownership structure and executive compensation in Germany. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=948926
  • Hampel Committee. (1998). Committee on Corporate Governance ( Final Report). London.
  • Hartzell, J. C., & Starks, L. T. (2003). Institutional investors and executive compensation. The Journal of Finance, 58(6), 2351–2374. doi:10.1046/j.1540-6261.2003.00608.x
  • Hassan, S., Christopher, T., & Evans, R. (2003). Directos’ remuneration and firm performance: Malaysian evidence. Malaysian Accounting Review, 2(1), 57–67.
  • Hill, H., Tham, S. Y., & Zin, R. H. M. (Eds.). (2012). Malaysia’s Development Challenges. Oxon: Routledge.
  • Hoskisson, R. E., Johnson, R. A., & Moesel, D. D. (1994). Corporate divestiture intensity in restructuring firms: Effects of governance, strategy, and performance. Academy of Management Journal, 37(5), 1207–1251. doi:10.2307/256671
  • Ibrahim, H., Abdul-Samad, M. F., & Amir, A. (2008). Board structure and corporate performance: Evidence from public-listed family-ownership in Malaysia. SSRN paper.
  • Ivanova, M. R. (2017). Institutional investors as stewards of the corporation: Exploring the challenges to the monitoring hypothesis. Business Ethics: A European Review, 26, 175–188. doi:10.1111/beer.12142
  • Jaafar, S. B., Abdul-Wahab, E. A., & James, K. (2012). Directors remuneration and performance in Malaysia family firms. World Review of Business Research, 2(4), 204–222.
  • Jara-Bertin, M., López-Iturriaga, F. J., & López-de-Foronda, Ó. (2008). The contest to the control in European family firms: How other shareholders affect firm value. Corporate Governance: An International Review, 16(3), 146–159.10.1111/corg.2008.16.issue-3
  • Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3, 305–360.10.1016/0304-405X(76)90026-X
  • Jensen, M. C., & Murphy, K. J. (1990). Performance pay and top-management incentives. Journal of Political Economy, 98(2), 225–264.10.1086/261677
  • Johnson, S., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2000). Tunneling. American Economic Review, 90(2), 22–27. doi:10.1257/aer.90.2.22
  • Kashif, S., & Mustafa, K. (2012). The determinants of CEO compensation: Evidence from family-owned listed corporations in Karachi stock exchange. Middle East Journal of Economics and Finance, 5(1–2), 45–61.
  • 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. doi:10.1016/j.jjie.2004.05.003
  • Kato, T., & Long, C. (2006). Executive compensation, firm performance, and corporate governance in China: Evidence from firms listed in the Shanghai and Shenzhen stock exchanges. Economic Development & Cultural Change, 54(4), 945–983.10.1086/503583
  • Koh, P.-S. (2007). Institutional investor type, earnings management and benchmark beaters. Journal of Accounting and Public Policy, 26(3), 267–299.10.1016/j.jaccpubpol.2006.10.001
  • Kok, C. (2014). Strong Foreign direct investment growth for Malaysia, but less than neighbours. Business News.
  • La Porta, R., Lopez-De-Silanes, F., & Shleifer, A. (1999). Corporate Ownership Around the World. The Journal of Finance, 54(2), 471–517.10.1111/0022-1082.00115
  • Lee, J. (2004). The Effects of family ownership and management on firm performance. SAM Advanced Management Journal (07497075), 69(4), 46–53.
  • Liew, C. Y., Alfan, E., & Devi, S. S. (2014). Family firms, expropriation and firm value: Evidence from related party transactions in Malaysia. The Journal of Developing Areas, 48(5), 139–153. doi:10.2139/ssrn.1874592
  • Lim, B. L., & Yen, S. H. (2011). Agency problem and expropriation of minority shareholders. Malaysian Journal of Economics Studies, 48(1), 37–59.
  • Lin, D., Kuo, H.-C., & Wang, L.-H. (2013). Chief executive compensation: An empirical study of fat cat CEOs. The International Journal of Business and Finance Research, 7(2), 27–42.
  • Lins, K. V. (2003). Equity ownership and firm value in emerging markets. The Journal of Financial and Quantitative Analysis, 38(1), 159–184. doi:10.2307/4126768
  • Malaysian Investment Development Authority. (2016). Malaysia investment performance report: Strengthening the growth momentum.
  • Maury, B. (2006). Family ownership and firm performance: Empirical evidence from Western European corporations. Journal of Corporate Finance, 12(2), 321–341. doi:10.1016/j.jcorpfin.2005.02.002
  • Maury, B., & Pajuste, A. (2005). Multiple large shareholders and firm value. Journal of Banking & Finance, 29(7), 1813–1834. doi:10.1016/j.jbankfin.2004.07.002
  • McCahery, J. A., Sautner, Z., & Starks, L. T. (2016). Behind the Scenes: The Corporate Governance Preferences of Institutional Investors. The Journal of Finance, 71(6), 2905–2932. doi:10.1111/jofi.12393
  • McConaughy, D. L. (2000). Family CEOs vs. nonfamily CEOs in the family-controlled firm: An examination of the level and sensitivity of pay to performance. Family Business Review, 13(2), 121–131. doi:10.1111/j.1741-6248.2000.00121.x
  • Ozkan, N. (2007). Do corporate governance mechanisms influence CEO compensation? An empirical investigation of UK companies. Journal of Multinational Financial Management, 17(5), 349–364.10.1016/j.mulfin.2006.08.002
  • Ozkan, N. (2011). CEO compensation and firm performance: An empirical investigation of UK panel data. European Financial Management, 17(2), 260–285. doi:10.1111/j.1468-036X.2009.00511.x
  • PWC. (2016). Board, shareholders, and executive pay. Retrieved from https://www.pwc.com/us/en/governance-insights-center/publications/assets/pwc-executive-compensation-series-boards-shareholders-and-executive-pay.pdf
  • Rampling, P., Eddie, I., & Liu, J. (2013). Executive remuneration in China: A literature review. Asian Review of Accounting, 21(2), 128–143.10.1108/ARA-10-2012-0056
  • Sakinah Azizan, S. S., & Ameer, R. (2012). Shareholder activism in family—Controlled firms in Malaysia. Managerial Auditing Journal, 27(8), 774–794.10.1108/02686901211257046
  • Schultz, E. L., Tan, D. T., & Walsh, K. D. (2010). Endogeneity and the corporate governance–performance relation. Australian Journal of Management, 35(2), 145–163.10.1177/0312896210370079
  • Securities Commission Malaysia (2011). Corporate governance blueprint 2011 role of institutional investors. Malaysia: Author.
  • Securities Commission Malaysia. (2012). Malaysian code on corporate governance 2012. Malaysia: Author.
  • Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. The Journal of Finance, 52(2), 737–783.10.1111/j.1540-6261.1997.tb04820.x
  • UNCTAD. (2014). World investment report 2014.
  • Villalonga, B., & Amit, R. (2006). How do family ownership, control and management affect firm value? Journal of Financial Economics, 80, 385–417.10.1016/j.jfineco.2004.12.005
  • Wahab, E. A., How, J. C. Y., & Verhoeven, P. (2007). The Impact of the Malaysian Code on Corporate Governance: Compliance, Institutional Investors and Stock Performance. Journal of Contemporary Accounting & Economics, 3(2), 106–129.10.1016/S1815-5669(10)70025-4
  • Wahal, S., & McConnell, J. J. (2000). Do institutional investors exacerbate managerial myopia? Journal of Corporate Finance, 6(3), 307–329. doi:10.1016/S0929-1199(00)00005-5
  • Yatim, P. (2013). Directors’ remuneration and corporate governance in Malaysia ( Working Paper). UKM-Graduate School of Business, Universiti Kebangsaan Malaysia.
  • Yoshikawa, T., Rasheed, A. A., & Del Brio, E. B. (2010). The impact of firm strategy and foreign ownership on executive bonus compensation in Japanese firms. Journal of Business Research, 63, 1254–1260.10.1016/j.jbusres.2010.06.012