An International Perspectiveon Performance Evaluation and Executive Compensation

In recent years performance measurement and compensation-related issues have gained significant attention from academic, professional, and social communities for a number of reasons. Whereas executive compensation based on acceptable performance metrics is still commonly considered as the most effective system to attract and retain management talents, excessive executive compensation has been found to be unjustifiable based on pay-for-performance principles and as such it has received strong critique. Consequently, performance measurement metrics and even their existence in companies and transparency have been questioned. Additionally, as a response to disastrous accounting and financial scandals and financial crisis, the recent international wave of corporate governance reforms tends to give larger monitoring power to board of directors and shareholders over the choice of performance metrics and the structure of compensation packages. It is understood, however, that internationally, executive compensation is remarkably heterogeneous. The special issue aims at providing a comparative analysis of performance measurement techniques and their relation to executive compensation practices existing in different countries, with a special focus on European organizations. The goal is to examine alternative competing theories and diverse empirical results around Europe and other countries to explain determinants of executive compensation practices as well as their outcomes especially on the performance measurement and management control system design. Research topics appropriate for this special issue would include, but not be limited to, the following examples: 1. Applications of competing theories (e.g., Agency Theory, Social-Network theory, Stewardship Theory) in performance measurement determination and executive compensation research 2. Determinants of performance metrics and executive compensation: a. Influence of organizational and national cultures b. Effects of disclosure regulations on pay-for-performance 3 c. Roles and competencies of compensation committees in setting performance metrics, supervising management rewarding systems and management compensation d. Corporate governance bodies and procedures e. Political and social influences on the choice of performance measurement systems f. Political and social pressures 3. Composition of executive compensation packages 4. Outcomes of executive compensation based on chosen performance measurement systems 5. Variation on the choice of performance metrics within international companies headquartered in Europe 6. Implementation of global compensation systems within international companies headquartered in Europe 7. Performance measurement processes and Executive compensation in times of financial crisis In terms of methodology, we welcome submissions that can be analytical, empirical or behavioral. We appreciate a variety of research strategies and methods for collecting and analyzing data. In the process of review, JAAF’s criteria will be applied.