Journal ArticleDOI
Determinants of US Outside Director Compensation
TLDR
In this article, the authors combined resource dependence and agency theories with previous research on executive salaries to develop an explanatory model of director compensation, and found that four variables were found to have a significant relationship with director compensation: firm size, firm profitability, equity ownership by directors, and resource richness of the board.Abstract:
Executive compensation has recently become the subject of extensive scrutiny by the popular press. However, compensation for corporate directors is one area which has only received little attention or research. The present study combined resource dependence and agency theories with previous research on executive salaries to develop an explanatory model of director compensation. Data were collected from US firms at two points in time to assess the stability of these predictors. Four variables were found to have a significant relationship with director compensation: firm size, firm profitability, equity ownership by directors, and resource richness of the board. However, the explanatory power of these variables appear to decline over time. Practical implications of these results are discussed.read more
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Determinants of Director Compensation in Two-Tier Systems: Evidence from German Panel Data
TL;DR: In this article, the authors investigate the influencing factors of both director compensation levels and structure, i.e., the probability of performance-based compensation, and find that compensation is systematically structured to mitigate agency conflicts and to encourage effective monitoring.
Journal ArticleDOI
Determinants of director compensation in two-tier systems: evidence from German panel data
TL;DR: In this article, the authors empirically examined the level and structure of director compensation in a two-tier setting using a novel data set covering German Prime Standard firms for the period 2005-2008.
An Empirical Investigation of the Determinants of Outside Director Compensation
Abstract: Using data on 200 large U.S. corporations in 1996, this study develops and tests a model in which the Compensation of Outside Directors is significantly related to Director Effort, External Monitoring, Internal Referents and Firm Performance, after controlling for Firm Size and Inside Ownership. There is some support for each set of hypotheses relating to the different independent variables in the model.
Journal ArticleDOI
An Empirical Investigation of the Determinants of Outside Director Compensation
TL;DR: This paper developed and tested a model in which the Compensation of Outside Directors is significantly related to Director Effort, External Monitoring, Internal Referents and Firm Performance, after controlling for Firm Size and Inside Ownership.
Journal ArticleDOI
Antecedents of New Director Social Capital
TL;DR: In this article, the antecedents of new director social capital were explored and found no support for the hypothesis that higher compensation is associated with adding directors with high status or board ties.
References
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Journal ArticleDOI
Significance tests and goodness of fit in the analysis of covariance structures
TL;DR: In this article, a general null model based on modified independence among variables is proposed to provide an additional reference point for the statistical and scientific evaluation of covariance structure models, and the importance of supplementing statistical evaluation with incremental fit indices associated with the comparison of hierarchical models.
Journal ArticleDOI
Separation of ownership and control
Eugene F. Fama,Michael C. Jensen +1 more
TL;DR: The authors argue that the separation of decision and risk-bearing functions observed in large corporations is common to other organizations such as large professional partnerships, financial mutuals, and nonprofits. But they do not consider the role of decision agents in these organizations.
Journal ArticleDOI
Large Shareholders and Corporate Control
Andrei Shleifer,Robert W. Vishny +1 more
TL;DR: In this article, the authors explore a model in which the presence of a large minority shareholder provides a partial solution to the free-rider problem in a corporation with many small owners, where the corporation may not pay any one of them to monitor the performance of the management.
Journal ArticleDOI
Performance Pay and Top Management Incentives
Kevin Murphy,Michael C. Jensen +1 more
TL;DR: For example, the authors estimates of the pay-performance relation (including pay, options, stockholdings, and dismissal) for chief executive officers indicate that CEO wealth changes $3.25 for every $1,000 change in shareholder wealth.
Book
Performance pay and top-management incentives
Michael C. Jensen,Kevin Murphy +1 more
TL;DR: For example, the authors estimates of the pay-performance relation (including pay, options, stockholdings, and dismissal) for chief executive officers indicate that CEO wealth changes $3.25 for every $1,000 change in shareholder wealth.