Abstract

http://ssrn.com/abstract=291054
 
 

References (34)



 
 

Citations (13)



 


 



Do Shareholders Benefit from the Adoption of Incentive Pay for
Directors?


Mason S. Gerety


Northern Arizona University - Department of Finance

Chun Keung (Stan) Hoi


Rochester Institute of Technology - Saunders College of Business

Ashok Robin


Rochester Institute of Technology (RIT)



Abstract:     
We assess the stock market reaction to proposals of incentive plans for directors in a sample of 289 firms. We note a reaction that is both economically and statistically insignificant. This result suggests that shareholders do not necessarily benefit from the adoption of such plans. Across firms we find that the market reaction depends on whether the CEO is involved in director selection. We find that stock markets react negatively to plans proposed by firms without nomination committees. Our findings highlight the important link between corporate governance and the effectiveness of director incentive plans.

Number of Pages in PDF File: 33

Keywords: Board of Directors, Corporate Governance, Incentive Compensation

JEL Classification: G3, G34

working papers series





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Date posted: November 22, 2001  

Suggested Citation

Gerety, Mason S. and Hoi, Chun Keung (Stan) and Robin, Ashok, Do Shareholders Benefit from the Adoption of Incentive Pay for Directors?. Available at SSRN: http://ssrn.com/abstract=291054 or http://dx.doi.org/10.2139/ssrn.291054

Contact Information

Mason S. Gerety
Northern Arizona University - Department of Finance ( email )
PO Box 15066
Flagstaff, AZ 86011
United States
602-523-7355 (Phone)
602-523-7331 (Fax)
Chun Keung (Stan) Hoi (Contact Author)
Rochester Institute of Technology - Saunders College of Business ( email )
105 Lomb Memorial Drive
Rochester, NY 14623
United States
585-475-2718 (Phone)
Ashok Robin
Rochester Institute of Technology (RIT) ( email )
College of Business
Rochester, NY 14623
United States
585-475 5211 (Phone)
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