Business, Management and Accounting
5 years ago

Corporate governance reforms in India lead to fairer CEO pay

2 views
Journal of Public Affairs
Does corporate governance affect CEO compensation in Indian manufacturing firms?
Pooja Patnaik, Damodar Suar

Paper Summary

The study looked at how CEO pay in Indian manufacturing firms is influenced by corporate governance and disclosure practices. They analyzed data from 282 firms over a six-year period. The findings show that having a larger board, more independent board members, women directors, and institutional holdings can lead to lower CEO compensation. Additionally, firms that disclose more information about environmental, social, and governance practices tend to have more structured CEO pay. It was also found that a CEO's current pay is influenced by their previous compensation. Overall, the study supports the idea that good governance practices can help optimize CEO pay in line with the Companies Act 2013.

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