AUSTRALIAN EXECUTIVE REMUNERATION: EVIDENCE ON STRUCTURE AND ACCOUNTING DETERMINANTS

Abstract

This study explores a relatively new source of Australian executive pay information disclosed in published Annual Reports since 1989. It offers not only a different source from which to compare the results of US studies, but also an extension of the studies through the additional Australian disclosure requirements. The first section of the paper examines four possible determinants of Australian executive remuneration, accounting rates of return, firm size, industry and executive control through share holding. In the second part of the paper we used the data to analyse whether the structure of pay in Australian companies is consistent with a particular hypothesis derived from tournament theory.