Do Directors Perform for Pay?
37 Pages Posted: 19 Jul 2004 Last revised: 23 Jul 2012
Many corporations reward their outside directors with a modest fee for each board meeting they attend. Using a large panel data set on director attendance behavior in publicly-listed firms for the period 1996-2003, we provide robust evidence that directors are less likely to have attendance problems at board meetings when board meeting fees are higher. This is surprising since meeting fees, on average roughly $1,000, represent an arguably small fraction of the total wealth of a representative director in our sample. Thus, corporate directors appear to perform for even very small financial rewards.
Keywords: Boards, Directors, Attendance, Meetings, Incentives
JEL Classification: G34, J41, M52, G3
Suggested Citation: Suggested Citation