Responsible compensation of top executives in times of crisis

[M. D. Ilić]

[18 listova], 252 str.

Biografija autora: str. [254]. Bibliografija: str. 217-252.

Strategije proizvodnje umreženih preduzeća

This dissertation examines the relationship between CEO compensation and corporate performance in times of crisis, with a particular focus on socially responsible reward practices. It is structured into four chapters: the first provides the theoretical framework of Corporate Social Responsibility (CSR), emphasizing responsible compensation and the protection of employees’ health and safety; the second explores the role of top managers and compensation models within corporate governance, highlighting the alignment of rewards with CSR objectives; the third analyzes the dynamics of executive pay during crises, using the COVID-19 pandemic as a case; while the fourth presents the empirical research. The aim was to investigate whether, and in what ways, the structure of executive compensation, especially its variable components, affects corporate outcomes and contributes to sustainable development during crises. The empirical analysis was conducted on a sample of 26,845 European companies drawn from the CapitalIQ database for the period 2019–2021, covering the banking, hospitality, automotive, and IT sectors. Using descriptive statistics, panel regression, and MANOVA analysis, the results demonstrate a strong and statistically significant relationship between executive compensation structures and company performance. Both total and variable pay exhibit different effects on profitability depending on the sector: while bonuses act as strong motivators in IT and hospitality, long-term incentives are more effective in the automotive industry, and variable compensation in banking may even produce negative effects. The crisis further accentuated these differences, with base salaries remaining relatively stable, while bonuses and benefits were more flexibly adjusted. Importantly, the findings confirm that responsible compensation practices—such as temporary salary reductions of executives—serve as a signal of solidarity, helping to preserve trust and foster long-term sustainability. These insights underline the necessity of adapting executive pay systems to sector-specific conditions and crisis contexts. Based on these results, a set of recommendations was formulated for top managers, boards of directors, and policymakers.

odgovorno nagrađivanje, top menadžeri, krizne situacije, održivost preduzeća

responsible compensation, top executives, crisis situations, corporate sustainability

005.911-057.177:005.66(043.3)

S190

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