Board control and ceo compensation
Strategic Management JournalPublished 1 June 1994
Brian Boyd
Citations833
SJR quartileQ1
SJR score10.18
SNIP3.84
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TL;DR
Although, as hypothesized, CEO salaries were greater in firms with lower levels of control, CEO compensation was not significantly related to firm size or profitability.
Abstract
Abstract The board of directors has been identified as a key internal control mechanism for setting CEO compensation. Theory suggests that CEOs will attempt to circumvent board control in an effort to maximize salary. This hypothesis was tested using a sample of 193 firms in a cross‐section of industries. Corporate governance literature was reviewed to develop a multiple indicator measure of board control. Although, as hypothesized, CEO salaries were greater in firms with lower levels of control, CEO compensation was not significantly related to firm size or profitability.
Keywords
Business, Management and Accounting
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