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CEO Compensation and Board Structure Revisited

Katherine Guthrie

College of William and Mary - Mason School of Business

Jan Sokolowsky


May 6, 2009

Chhaochharia and Grinstein (2009) estimate that CEO pay decreases by 17% more in firms whose boards were not compliant with the recent NYSE/NASDAQ independence requirements than in firms that were compliant. We document that 65% of the magnitude is driven by a single outlier. All our attempts to improve the estimate – by (i) correcting classification errors in board compliance; (ii) adding firms to the sample that satisfy the sample selection criteria; and (iii) differentiating by the presence of substitute governance mechanisms – further weaken the result. We conclude that board independence has no effect on the level of CEO pay.

Number of Pages in PDF File: 22

Keywords: CEO pay, executive compensation, managerial power, board independence, board structure, Sarbanes-Oxley, NYSE, Nasdaq

JEL Classification: G34, G38, J33, J38

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Date posted: September 7, 2010  

Suggested Citation

Guthrie, Katherine and Sokolowsky, Jan, CEO Compensation and Board Structure Revisited (May 6, 2009). Available at SSRN: http://ssrn.com/abstract=1673007 or http://dx.doi.org/10.2139/ssrn.1673007

Contact Information

Katherine Guthrie
College of William and Mary - Mason School of Business ( email )
P.O. Box 8795
Williamsburg, VA 23187-8795
United States
7572212832 (Phone)
Jan Sokolowsky (Contact Author)
Independent ( email )
Feedback to SSRN

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References:  25
Citations:  16

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