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CEO Compensation Among Firms Controlled by Large Shareholders: Evidence from Emerging Markets

Pontificia Universidad Catolica de Chile Documento de Trabajo No. 381, 2010

50 Pages Posted: 3 Dec 2010  

Francisco A. Gallego

Pontificia Universidad Catolica de Chile

Borja Larrain

Pontificia Universidad Catolica de Chile

Date Written: september 1, 2010

Abstract

Using a novel data base for three emerging markets, we find that the type of large shareholder matters for CEO compensation. In particular, we find a compensation premium of about 30 log points for professional (not controller-related) CEOs working in firms controlled by a family compared to firms controlled by other large shareholders. The premium cannot be explained away by standard firm characteristics, observable executive skills (e.g., education or tenure), or the compensation of the CEO in her former job. The premium comes mostly from family firms with absent founders and when sons are involved.

Suggested Citation

Gallego, Francisco A. and Larrain, Borja, CEO Compensation Among Firms Controlled by Large Shareholders: Evidence from Emerging Markets (september 1, 2010). Pontificia Universidad Catolica de Chile Documento de Trabajo No. 381, 2010. Available at SSRN: https://ssrn.com/abstract=1718704 or http://dx.doi.org/10.2139/ssrn.1718704

Francisco A. Gallego (Contact Author)

Pontificia Universidad Catolica de Chile ( email )

Casilla 76
Correo 17
Santiago
Chile

HOME PAGE: http://www.economia.puc.cl/fgallego

Borja Larrain

Pontificia Universidad Catolica de Chile ( email )

Ave. Vicuna Mackenna 4860, Macul
Santiago
Chile

HOME PAGE: http://economiayadministracion.uc.cl/personal/blarrain/

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