Leverage and Executive Pay-Performance of The Indonesian Family Firms

Authors

  • Aang Kunaifi Institut Teknologi Sepuluh Nopember Surabaya Indonesia
  • Ninditya Nareswari Institut Teknologi Sepuluh Nopember Surabaya Indonesia
  • Byz Risyad Institut Teknologi Sepuluh Nopember Surabaya Indonesia

Keywords:

Leverage, Executive compensation, Pay-performance, Firm performance, Family firm

Abstract

This study aims to investigate the impact of firm performance on executive compensation. This study also examines the moderating role of leverage on the firm performance and executive pay-performance relationship. Used data panel regression as a method, this study showed that firm performance had a positive impact on executive compensation. This paper also showed that leverage weakens the pay-performance relationship. These results indicate that creditors prefer to assess family firm performance based on the risk rather than accounting performance. Higher leverage illustrated a high risk. The firm with high risk indicated poor executive performance. As a result, compensation will be lower.

Downloads

Download data is not yet available.

Downloads

Published

2021-03-04

How to Cite

Kunaifi, A., Nareswari, N., & Risyad, B. (2021). Leverage and Executive Pay-Performance of The Indonesian Family Firms. Conference Series, 3(1), 41-47. Retrieved from https://adi-journal.org/index.php/conferenceseries/article/view/351