Relationship between Top executive compensation and corporate governance: evidence from large Italian listed companies

The research investigates the impact of corporate governance variables –ownership, board of directors and remuneration committee– on executive compensation. A balanced sample of 52 Italian listed companies has been adopted to test the hypotheses, covering 55.98% and 47.13% of market capitalization in 2011 and 2015 respectively and including 669 board members. Theoretical models evidence a certain stability of compensation schemes for Italian managers over time. Findings suggest that there is a statistically significant positive effect of familiar ownership on the amount of compensation. Along with nature of ownership, the number of directors in the remuneration committee appointed by minorities assume a determinant role. With statistical significance, it affects negatively the compensation level, but, contrarily to best practices, it affects negatively the adoption of forms of incentive compensation