Emmanuel Adu-Ameyaw
Executive bonus compensation and financial leverage: Do growth and executive ownership matter?
Adu-Ameyaw, Emmanuel; Danso, Albert; Acheampong, Samuel; Akwei, Cynthia
Authors
Albert Danso
Samuel Acheampong
Cynthia Akwei
Abstract
Purpose: This study aims to examine the impact of executive bonus compensation on a firm’s financial leverage policy and the extent to which this compensation–leverage relation is moderated by firm growth and executive ownership. Design/methodology/approach: Using data from 213 non-financial and non-utility UK FTSE 350 firms for the period 2007–2015, generating a total of 1,784 firm-year observations, panel econometric methods are used to test the model. Findings: Drawing insights from agency theoretic view, this paper uncovers that managerial cash bonus compensation is negatively and significantly related to financial leverage. However, stock bonus compensation has a positive and significant impact on leverage. This study also observes that compensation–leverage is moderated by both firm growth and executive ownership. The results remain robust to alternative econometric models. Originality/value: While this paper builds on the risk-motivated argument of executive bonus compensation literature, it is the first – to the best of the knowledge – to explore the bonus compensation-corporate financial leverage and, particularly, examine the extent to which firm growth and corporate executive ownership matter in this relationship.
Journal Article Type | Article |
---|---|
Acceptance Date | Feb 26, 2021 |
Online Publication Date | May 19, 2021 |
Publication Date | Aug 3, 2021 |
Deposit Date | Apr 19, 2021 |
Publicly Available Date | Jun 20, 2021 |
Journal | International Journal of Accounting and Information Management |
Print ISSN | 1834-7649 |
Electronic ISSN | 1758-9037 |
Publisher | Emerald |
Peer Reviewed | Peer Reviewed |
Volume | 29 |
Issue | 3 |
Pages | 392-409 |
DOI | https://doi.org/10.1108/IJAIM-09-2020-0141 |
Public URL | https://uwe-repository.worktribe.com/output/7268729 |
Files
Executive bonus compensation and financial leverage: Do growth and executive ownership matter?
(975 Kb)
PDF
Licence
http://creativecommons.org/licenses/by-nc/4.0/
Copyright Statement
This author accepted manuscript is deposited under a Creative Commons Attribution Non-commercial 4.0 International (CC BY-NC) licence. This means that anyone may distribute, adapt, and build upon the work for non-commercial purposes, subject to full attribution. If you wish to use this manuscript for commercial purposes, please contact permissions@emerald.com
You might also like
Proactive environmental strategy and firm performance at the bottom of the pyramid
(2020)
Journal Article
Investigating the effect of managerial compensation incentives on investment and financing decisions (1077)
(2019)
Presentation / Conference Contribution
Growth opportunity and investment policy: The role of managerial incentives
(2022)
Journal Article
Downloadable Citations
About UWE Bristol Research Repository
Administrator e-mail: repository@uwe.ac.uk
This application uses the following open-source libraries:
SheetJS Community Edition
Apache License Version 2.0 (http://www.apache.org/licenses/)
PDF.js
Apache License Version 2.0 (http://www.apache.org/licenses/)
Font Awesome
SIL OFL 1.1 (http://scripts.sil.org/OFL)
MIT License (http://opensource.org/licenses/mit-license.html)
CC BY 3.0 ( http://creativecommons.org/licenses/by/3.0/)
Powered by Worktribe © 2024
Advanced Search