Relationship between CEO Salaries and Performance of Banks in Australia and Germany

Dagmar Preißing; Gregory Southey; Gregory Laing

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Relationship between CEO Salaries and Performance of Banks in Australia and Germany

Journal article

Open access

Peer reviewed

Relationship between CEO Salaries and Performance of Banks in Australia and Germany

Dagmar Preißing, Gregory Southey and Gregory Laing

e-Journal of Social & Behavioural Research in Business, Vol.4(1), pp.12-19

2013

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Abstract

Business and Management

CEO salary packages

banking sector

firm performance

measures

Purpose: The purpose of this paper was to examine the relationship between CEO salaries and firm performance in the banking sector. Design/methodology/approach: The data relating to a six year period (2007 - 2012) was gathered from databases and the websites of the major banks in Australia and Germany. The data was subjected to Regression and Pearson Correlation Analysis to test if there was a positive correlation between total salary including incentive bonuses against the variables indicating the performance of the firm. Findings: The tests indicate a weak relationship between the CEO salary package and the key indicators of a firm's performance in Australian banks but a strong relationship in the German banks. Research limitations/implications: This study was limited in that it only covers the major banks in Australia and Germany and may therefore not be relevant to different countries with different economic climates. Practical implications: This study provides additional evidence to support the continued debate regarding the need to have greater accountability for CEO salary packages linked to actual performance measures of firms. Originality/value: This paper adds to the literature in so far as it compares two different Countries of the banking sector in a global market.

Details

Title: Relationship between CEO Salaries and Performance of Banks in Australia and Germany
Authors: Dagmar Preißing (Author) - University of Applied Sciences Fulda, Germany
Gregory Southey (Author) - Queensland University of Technology
Gregory Laing (Author) - University of the Sunshine Coast - Faculty of Arts and Business
Publication details: e-Journal of Social & Behavioural Research in Business, Vol.4(1), pp.12-19
Publisher: Australian Business Education Research Association
Date published: 2013
ISSN: 1838-8485
Organisation Unit: University of the Sunshine Coast, Queensland
Language: English
Record Identifier: 99448710902621
Output Type: Journal article

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