Board control and ceo compensation

Research output: Contribution to journalArticlepeer-review

448 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)335-344
Number of pages10
JournalStrategic Management Journal
Volume15
Issue number5
DOIs
StatePublished - Jun 1994
Externally publishedYes

Keywords

  • agency theory
  • Boards of directors
  • executive compensation
  • strategy implementation

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

Fingerprint

Dive into the research topics of 'Board control and ceo compensation'. Together they form a unique fingerprint.

Cite this