Institutional investors and CEO pay performance in Malaysian firms

Tee Chwee Ming, Yee Boon Foo, Ferdinand A. Gul, Abdul Majid

Research output: Contribution to journalArticleResearchpeer-review

16 Citations (Scopus)


This study uses Malaysian data to examine whether institutional investors affect the association between firm performance and CEO compensation. Overall, we find that total institutional investor ownership has a negative effect on the positive association between firm performance and CEO compensation, which suggests ineffective monitoring. When the institutional investors are categorized into local and foreign, we find that the negative effect is driven by local institutional ownership, consistent with the argument that foreign institutional investors are associated with better monitoring. Our results provide new insights on the association between institutional investors and the CEO compensation-firm performance relationship in an emerging economy.

Original languageEnglish
Pages (from-to)87-102
Number of pages16
JournalJournal of International Accounting Research
Issue number1
Publication statusPublished - 2018


  • CEO compensation
  • Institutional investors’ domiciles
  • Institutional investors’ ownership
  • Malaysia

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