On the Compensation and Activity of Corporate Boards

Posted: 14 Apr 2017

Date Written: December 11, 2014

Abstract

Within the nexus of contracts that makes up the firm, relatively little is known about the relationship between firms and their directors. Using a unique dataset comprising director compensation and activity, I find that firms use meeting fees and equity-based compensation as substitutes. In addition, paying directors for attending board/committee meetings is associated with more active boards and more active monitoring and advising committees. In contrast, a higher proportion of equity-based compensation is positively associated with monitoring activity but negatively associated with advising activity. Furthermore, more active boards and committees are paid more. Finally, I find that the variation in director compensation and activity generally reflects trade-offs between the costs and benefits of director effort, consistent with prior work.

Keywords: Corporate Boards; Director Compensation; Director Activity; Contracting; Committee Meetings

JEL Classification: G30; G34

Suggested Citation

Nguyen, Nga, On the Compensation and Activity of Corporate Boards (December 11, 2014). Journal of Corporate Finance, Volume 29, Pages 1–19, December 2014. Available at SSRN: https://ssrn.com/abstract=2951439

Nga Nguyen (Contact Author)

Marquette University ( email )

P.O. Box 1881
Milwaukee, WI 53201-1881
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
206
PlumX Metrics