Abstract

http://ssrn.com/abstract=2074895
 
 

References (23)



 
 

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CEO Compensation and Board Structure Revisited – Addendum


Katherine Guthrie


College of William and Mary - Mason School of Business

Jan Sokolowsky


Independent

Kam-Ming Wan


Hong Kong Polytechnic University

March 27, 2012


Abstract:     
Using Chhaochharia’s and Grinstein’s (JF, 2009) data and methodology, Guthrie, Sokolowsky, and Wan (JF, 2010) document that compensation committee independence leads to an increase in executive pay, and that the increase is concentrated in firms with powerful monitors. These findings stand in sharp contrast to the prediction of the managerial power hypothesis that director independence effectively curbs rent extraction in the form of excessive CEO pay. While it is tempting to reject the managerial power hypothesis, the evidence alternatively calls into question the effectiveness of director independence in corporate governance or the importance of reducing CEO pay to directors. In this addendum, we discuss these two possibilities.

Number of Pages in PDF File: 9

Keywords: executive compensation, CEO pay, board structure, board independence, corporate governance, compensation committee, Sarbanes-Oxley Act

JEL Classification: G34, G38, J31, J33

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Date posted: June 4, 2012 ; Last revised: March 20, 2013

Suggested Citation

Guthrie, Katherine and Sokolowsky, Jan and Wan, Kam-Ming, CEO Compensation and Board Structure Revisited – Addendum (March 27, 2012). Available at SSRN: http://ssrn.com/abstract=2074895 or http://dx.doi.org/10.2139/ssrn.2074895

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 )
Kam-Ming Wan
Hong Kong Polytechnic University ( email )
Hung Hom, Kowloon
Hong Kong
(852) 2766-7053 (Phone)
(852) 2330-9845 (Fax)
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