Corporate Governance and Top - Management Compensation in Public Companies
Streszczenie
The purpose of the paper is the presentation of initial findings of analyses
focussed on factors determining the level of top-management compensation in
Polish companies listed on the Warsaw Stock Exchange. Among others such
factors are presented as firm size, complexity of the decision-making process,
the form of control over the company, type of corporate govemance.
Verification of a simple model was carried out on a sample of 195 companies.
An analysis of collected empirical materiał confirmed a part of formulated
hypotheses. Firstly, a form of control over the company determines topmanagement compensation level. In companies, in which executives hold
a dominant błock of shares the average compensation is by almost 30% lower
than compensation in the remaining companies. Even bigger variations were
observed in companies with a dominant foreign investor. Average executive
compensation was almost twice higher in them. On the other hand, presence of a
strategie domestic investor or the State Treasury did not account for any
statistically significant vanations in top- management compensation.
A hypothesis about correlation between executive compensation and firm size
was also confinned. For the group of companies controlled by executives, this
correlation is the strongest when examining sales dynamics. There were not
discovered any statistically significant correlation between compensation level
and dynamics and relative effectiveness indices (ROE, ROA, profitability
of sales)
Statistically significant correlation between executive compensation and
absolute profit level and cash flow index (profit plus depreciation) could be
observed in all groups of companies with the exception of companies with
foreign investor.