CEO compensation in Australia: Is there a relationship between principles, policies and practices?
AbstractAgainst a background of much debate and controversy, CEO compensation continues to increase at twice the rate of average weekly income in Australia. This paper first critically analyses the criteria upon which CEO compensation is established, and the policies which have facilitated the increasing divergence between CEO compensation and that of the rest of the workforce. Second the paper investigates the relationship between CEO compensation and organisational performance across a diverse range of listed Australian companies over an II-year period. The results from this study indicate there is a very weak positive relationship between CEO compensation and organisational performance. Third, the paper explores emerging issues and trends in the ongoing refinement of the relationship between CEO compensation and organisational performance.