Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
The Effect of National Culture on CEO Compensation: Evidence from Europe and North America
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2010 (English)Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

The purpose of this paper is to determine the extent to which culture, in six European and two North-American countries, affects CEO compensation. If differences in culture between countries can provide an explanation for cross-national differences in CEO compensation, it may increase multinational corporations understanding of how to design CEO compensations in the countries where they operate. Acquiring such knowledge would maximize the effect of their compensation plans. The study relates cultural dimensions to total CEO compensation and the ratio between variable compensation and total CEO compensation.

Cultural data, which comprises the study’s theoretical foundation, is based on the GLOBE study (House et al., 2004). Of the GLOBE study’s nine cultural dimensions, the study examines the five dimensions found most relevant to CEO compensation practices; performance orientation, uncertainty avoidance, institutional collectivism, future orientation and power distance. The research has been conducted through a regression analysis of 240, both private and publically listed companies. Companies with a turnover above €49 million or at least 250 employees were randomly chosen in Sweden, Germany, Netherlands, United States, Canada, France, Ireland and United Kingdom.

The study’s results shows that the cultural dimensions examined, to different extent do affect CEO compensation. The results show total CEO compensation to be negatively related to institutional collectivism, power distance and performance orientation. Further, total CEO compensation is positively related to future orientation. The proportion of variable compensation to total CEO compensation is negatively related to institutional collectivism and uncertainty avoidance. The proportion of variable compensation to total CEO compensation is positively related with future orientation. Thus we conclude that culture can contribute to understand cross-national differences in CEO compensation.

Place, publisher, year, edition, pages
2010. , p. 49
Keywords [en]
CEO compensation, culture, the GLOBE study
National Category
Business Administration
Identifiers
URN: urn:nbn:se:uu:diva-126558OAI: oai:DiVA.org:uu-126558DiVA, id: diva2:324817
Uppsok
Social and Behavioural Science, Law
Supervisors
Available from: 2010-06-17 Created: 2010-06-16 Last updated: 2010-06-17Bibliographically approved

Open Access in DiVA

fulltext(1004 kB)698 downloads
File information
File name FULLTEXT01.pdfFile size 1004 kBChecksum SHA-512
aa7b35e736a657fa12b3715f2d89fd340660372a3a7c06f587074699173fd412ad24a4d3316849eb05662951b2c43ff7e94d26e6d498afa02c5e5695c8a2b1ab
Type fulltextMimetype application/pdf

By organisation
Department of Business Studies
Business Administration

Search outside of DiVA

GoogleGoogle Scholar
Total: 698 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

urn-nbn

Altmetric score

urn-nbn
Total: 1127 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf