IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v196y2025ics0148296325002243.html
   My bibliography  Save this article

On the relevance of mandatory executive pay ratio disclosure: Evidence from India

Author

Listed:
  • Bisht, Nidhi S.
  • Mohebshahedin, Mahmood
  • Tripathy, Arun Kumar
  • Mahajan, Ashish
  • Gupta, Amit Kumar

Abstract

Amid growing concerns over excessive executive compensation and income inequality, some countries, including India, have mandated the disclosure of executive pay ratios. Using longitudinal data from the top 500 publicly listed Indian companies (2016–2021), our findings reveal that a high executive pay ratio negatively impacts organizational performance, with the effect being more pronounced in the service industry compared to manufacturing. Temporal analysis reveals a gradual decrease or stabilization in pay ratios over time, suggesting progress toward the regulatory goal of reducing pay inequality. We argue that high executive pay ratios, which deviate from normative expectations, trigger adverse stakeholder reactions. By bridging the broader discourse on pay disparity with the evolving implications of transparency mandates, our findings emphasize the importance of legitimate and socially acceptable pay dispersion practices and demonstrate the effectiveness of transparency regulations in addressing income inequality.

Suggested Citation

  • Bisht, Nidhi S. & Mohebshahedin, Mahmood & Tripathy, Arun Kumar & Mahajan, Ashish & Gupta, Amit Kumar, 2025. "On the relevance of mandatory executive pay ratio disclosure: Evidence from India," Journal of Business Research, Elsevier, vol. 196(C).
    • Handle: RePEc:eee:jbrese:v:196:y:2025:i:c:s0148296325002243
    DOI: 10.1016/j.jbusres.2025.115401
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296325002243
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2025.115401?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:196:y:2025:i:c:s0148296325002243. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.