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Executive Compensation Policy and Company Performance in Japan

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  • Katsuyuki Kubo

Abstract

The purpose of this paper is to analyse whether companies'"way to pay their director" matters or not. Firstly, we fail to find a positive relationship between the performance-pay sensitivity and company performance. Thus, these results do not support our hypothesis that those companies that intensify the performance-pay sensitivity are more likely to improve their performance. In addition, this research fails to find a positive relationship between the change of pay policy and performance. These results are consistent with previous studies that directors' pay is not designed to motivate directors to work toward shareholders' value. Copyright Blackwell Publishing Ltd 2005.

Suggested Citation

  • Katsuyuki Kubo, 2005. "Executive Compensation Policy and Company Performance in Japan," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(3), pages 429-436, May.
  • Handle: RePEc:bla:corgov:v:13:y:2005:i:3:p:429-436
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    References listed on IDEAS

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    1. Höpner, Martin, 2001. "Corporate governance in transition: Ten empirical findings on shareholder value and industrial relations in Germany," MPIfG Discussion Paper 01/5, Max Planck Institute for the Study of Societies.
    2. Dore, Ronald, 2000. "Stock Market Capitalism: Welfare Capitalism: Japan and Germany versus the Anglo-Saxons," OUP Catalogue, Oxford University Press, number 9780199240616.
    3. Höpner, Martin, 2003. "Wer beherrscht die Unternehmen? Shareholder Value, Managerherrschaft und Mitbestimmung in Deutschland," Schriften aus dem Max-Planck-Institut für Gesellschaftsforschung Köln, Max Planck Institute for the Study of Societies, volume 46, number 46.
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    Cited by:

    1. Moriguchi, Chiaki, 2010. "Top wage incomes in Japan, 1951-2005," Journal of the Japanese and International Economies, Elsevier, vol. 24(3), pages 301-333, September.
    2. Mehrotra, Vikas & Morck, Randall & Shim, Jungwook & Wiwattanakantang, Yupana, 2013. "Adoptive expectations: Rising sons in Japanese family firms," Journal of Financial Economics, Elsevier, vol. 108(3), pages 840-854.
    3. Yoshikawa, Toru & Rasheed, Abdul A. & Del Brio, Esther B., 2010. "The impact of firm strategy and foreign ownership on executive bonus compensation in Japanese firms," Journal of Business Research, Elsevier, vol. 63(11), pages 1254-1260, November.
    4. Toru Yoshikawa & Jean McGuire, 2008. "Change and continuity in Japanese corporate governance," Asia Pacific Journal of Management, Springer, pages 5-24.
    5. Waldenberger Franz, 2013. "“Company heroes” versus “superstars”: executive pay in Japan in comparative perspective," Contemporary Japan, De Gruyter, vol. 25(2), pages 189-213, August.
    6. Sunny Sun & Xia Zhao & Haibin Yang, 2010. "Executive compensation in Asia: A critical review and outlook," Asia Pacific Journal of Management, Springer, pages 775-802.
    7. Gregory Jackson, 2016. "Toward a Conceptual Framework for Understanding Institutional Change in Japanese Capitalism: Structural Transformations and Organizational Diversity," Working Papers halshs-01643921, HAL.
    8. Igor Filatotchev & Gregory Jackson & Chizu Nakajima, 2013. "Corporate governance and national institutions: A review and emerging research agenda," Asia Pacific Journal of Management, Springer, pages 965-986.

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