Remuneration committees, shareholder dissent on CEO pay and the CEO pay-performance link

Abstract

We provide evidence on whether the adoption of the full Australian Securities Exchange recommendations for remuneration committee formation and structure are associated with a lower shareholder dissenting vote or a stronger CEO pay–performance link. We find some evidence that a minority- and majority-independent remuneration committee and a committee size of at least the recommended three members are associated with lower shareholder dissent. Companies with an independent committee have a stronger CEO pay–performance link. In addition, a majority-independent committee strengthens the link between performance and growth in CEO pay.