How does executive compensation influence voluntary turnover?

Overview

Corporate remuneration schemes can attract, retain, and motivate executives to exert effort and align their interests with shareholders’ interests. Prior studies find that executives are likely to resign when they are paid less than their peers, leading to a high rate of managerial turnover. However, paying excess compensation reduces firm value and it’s commonly related to firm underperformance. On the other hand, replacing top executives can be extremely costly for firms. Therefore, it’s very important to understand the reasons behind a top executive exit.

This project aims to examine the association between executive compensation and voluntary turnover. The research will provide evidence on how to design optimal compensation contracts to keep talented managers remain with the firm. The research results will inform the board of directors, shareholders, and remuneration committees of useful strategies when setting internal corporate governance mechanisms.

Research activities

A variety of research activities could be applied to address the research topic, including literature review, data analysis, and participating in writing a scholarly paper.

Outcomes

Your supervisor will provide guidance and training throughout the program and you will be experiencing research and developing research skills, and contributing to a published research output (research article/report).

Skills and experience

We are looking for a student who has excellent written communication skills, and who can work independently and complete tasks, delivering high-quality outcomes.

Scholarships

You may be eligible to apply for a research scholarship.

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Keywords

• executive compensation
• managerial turnover
• corporate governance
• executive retention
• agency problems

Contact

Contact the supervisor for more information.