Title: Does the Composition of the Compensation Committee Influence CEO Compensation Practices
Abstract: This paper examines whether compensation committee composition affects CEO compensation practices. We find that CEOs receive preferential treatment (at shareholders' expense) when insiders are members of the compensation committee. We do not find that CEO compensation is greater in firms that have insiders on the compensation committee than it is in firms that do not. However, we show that the relation between CEO compensation and performance is more favorable toward the CEO (i.e., biased in the CEO's favor at shareholder expense) among the firms that have insiders on the compensation committee.
Publication Year: 2001
Publication Date: 2001-09-12
Language: en
Type: article
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Cited By Count: 15
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