Abstract

This paper investigates the relationship between the gender composition of firms’ remuneration committees and the relative weight of variable monetary compensation in these firms’ top executives’ compensation packages. Previous archival research into executive compensation has mainly relied on agency theory, managerial power theory and tournament models to construct its theoretical frameworks. However, both psychological and corporate governance-related research concerning gender differences in, for instance, risk- and inequality-aversion, suggest that the gender variable should be included in the academic debate on executive compensation.

Controlling for size, industry, and corporate governance variables, this paper uses simple least squares analysis to regress measures of the relative weight of variable compensation against measures of female presence in remuneration committees, in a sample of 25 806 fiscal year/executive combinations. This regression is repeated in a multilevel model that controls for firm fixed effects in a sample of 9048 fiscal year / executive combinations. The results indicate that a female presence in the remuneration committee is negatively associated with the relative weight of the annual bonus in top executives’ compensation contracts.

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