Do Directors Perform for Pay?

37 Pages Posted: 19 Jul 2004 Last revised: 23 Jul 2012

See all articles by Renee B. Adams

Renee B. Adams

University of Oxford; ABFER

Daniel Ferreira

London School of Economics - Department of Finance; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Abstract

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

Adams, Renée B. and Ferreira, Daniel, Do Directors Perform for Pay?. EFA 2004 MAASTRICHT, Available at SSRN: https://ssrn.com/abstract=887500 or http://dx.doi.org/10.2139/ssrn.565942

Renée B. Adams (Contact Author)

University of Oxford ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

ABFER

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

Daniel Ferreira

London School of Economics - Department of Finance ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
(+44) 20 7955 7544 (Phone)

HOME PAGE: http://personal.lse.ac.uk/FERREIRD/

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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