The impact of institutions in influencing IPO Firm voluntary disclosure of CEO salary

This study examines the influence of the structure of the institutional environment in determining whether a firm voluntarily discloses CEO salary or not. Using a unique sample of 202 IPO firms from across Africa between 2000 and 2014 we find that firm’s with higher proportions of board comprised of indigenous social elites are less likely to voluntarily disclose CEO pay while this is positively moderated by institutional quality. However CEO pay disclosure is much less likely in civil code law jurisdictions – in line with a lack of institutional complementarities between common law Anglo-Saxon framework within which executive pay disclosure is embedded and civil code law – and less likely in societies that have extensive ethnic fractionalization. This latter finding is a reflection of the necessity of a degree of institutional homogeneity within which successful assimilation of foreign “best practice” such as CEO pay disclosure can take place