The Us And Australian Corporate Backgrounds - 1285 Words

The US and Australian corporate backgrounds both differ in industry and company level. With respect to the former, differences are observed in the industry mix of ï ¬ rms characteristics across the two economies. Specifically, a greater concentration of mineral resources public companies is observable in Australian market. For instance, these firms constitute 26% of our sample for the period 2003-2013. With respect to the firm-level differences are also highlighted in both economies. For instance, Schultz et al. (2013) note that board of directors are normally both smaller and have a lower fraction of non-executive directors. Thus, many small resources companies listed on ASX are interested in hiring directors based on their skills and†¦show more content†¦This is in sharp contrast to the US, where these two components account for 25% and 39% of total payment, respectively (Fernandes et al., 2012 and Schultz et al., 2013). In addition, Murphy (2013) and Schultz et al. (20 13) argue that US companies remuneration model is based on tax policies that place a $1 million cap on deductible cash remuneration and US stock exchange listing rules that encourage equity and options components of remuneration. However, comparable inducements in form of regulated payments are not observed in the Australian market (Schultz et al., 2013) and normally, these incentives promote shareholders’ wealth by aligning managers and stock holders interests. In terms of regulatory settings, Australian public companies are regulated and supervised by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001. Therefore, ASIC is charged with responsibility for overseeing the the Act and make sure that Australian listed companies comply with it. Schedule 5 of the Corporations Act requires companies to disclosure top executives remuneration. According to Schultz et al. (2013) and Merhebi et al. (2006) before October 1986 listed companies were obliged to reveal only information about total remuneration of top executive officers who were earning more than