Ledelsesaflønning: En analyse af incitamentsprogrammer som en del af lønpakken til administrerende direktører i danske børsnoterede selskaber

Caroline M. Barntved & Christoffer Kluge

Student thesis: Master thesis


This study examines the use of incentive programmes as part of the remuneration to chief executive officers in Danish publicly traded companies. The paper analyses how the level and composition of the remuneration pack-age can be explained by certain company characteristics. Furthermore, the study identifies common character-istics of CEO remuneration for the best performing companies measured over the last five years.

Publicly available data is gathered manually for all companies, giving an updated overview of CEO compensation across company size and sector. A comparative analysis of the updated dataset compared to previous studies shows a general increase in the use of incentive programmes as part of CEO remuneration. Both the level of total CEO compensation and the relative share of variable pay have increased. These increases are primarily driven by larger companies.

The use of performance criteria in connection with incentive programmes differs between companies. Larger firms often use a larger number of criteria of both financial and non-financial nature as well as a combination of both short- and long-term perspectives. Opposite trends are observed for smaller companies.

In the analysis of determinants of CEO pay it is uncovered, in accordance with previous studies, that firm size is a significant determining factor of CEO pay in terms of both level and structure. Furthermore, firm performance is found to be significantly positively correlated to both the level of and change in total CEO pay.

Common characteristics of the top-performing companies with regard to incentive programmes indicate that performance-dependent pay has a positive effect on long-term firm performance. It is emphasised that these common characteristics do not represent a definite formula for success.

Incentive pay is a broad and complex subject. Causality poses a substantial challenge in the analysis. Therefore, the results are indications rather than definite conclusions. Nevertheless, this study contributes with interesting observations that encourage further studies of the abovementioned patterns.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2020
Number of pages119
SupervisorsKen L. Bechmann