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Working Papers (2008), ESSEC Business School

CEO Compensations in a Stakeholders' Regime: An Empirical Investigation With French Listed Companies

JENY Anne, MISSONIER-PIERA F., MARGAIINE J.

Intense controversy has surrounded the publication of the level of Chief Executives Officers' (CEO) compensation over the last years. Some studies have shown a positive relationship between CEO pay and firm performance, in the US and in the UK. Executive compensation is also closely related to the corporate governance structure which differs significantly in France from that in the US and the UK. Traditionally, very little information has been made publicly available on executive compensation in France. In 2002, publicly listed companies were asked to report CEO and board of directors' compensation (NRE law, 15 May 2001). Using a sample of 110 firms listed in France on the 2002-2004 periods (SBF 120 index), the purpose of the study is to shed some light on compensation of CEOs in a country that is known to be rather conservative on that point. We test the determinants of CEO compensations defined by three measures: individual salary, annual bonus, and total CEO compensation. Preliminary results show that executive compensations are explained by size and market-based performance for the annual bonus. The findings on risk are more mitigate and indicate that the firm specific risk is negatively associated with CEO compensation, as Gray and Cannela (1997) have shown. Finally, the corporate governance variables have a significant impact on the level of executive compensations.

JENY, A., MISSONIER-PIERA, F. and MARGAIINE, J. (2008). CEO Compensations in a Stakeholders' Regime: An Empirical Investigation With French Listed Companies. ESSEC Business School.

Keywords : #Gouvernement-d'entreprise, #Performance, #Rémunération-des-dirigeants