Is board compensation excessive?

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dc.contributor.author Dah, Mustafa A.
dc.contributor.author Frye, Melissa B.
dc.date.accessioned 2018-03-15T14:25:19Z
dc.date.available 2018-03-15T14:25:19Z
dc.date.copyright 2017 en_US
dc.date.issued 2018-03-15
dc.identifier.issn 1872-6313 en_US
dc.identifier.uri http://hdl.handle.net/10725/7216 en_US
dc.description.abstract We develop a model to predict expected or normal director compensation. Based on this, we then calculate whether directors of corporate boards are over- or undercompensated. On average, we find greater evidence of over- rather than undercompensation. For companies that overpay, the average excess compensation is greater than $60,000 per director, while directors that are underpaid receive about $33,000 less than predicted. Excess compensation declines over our sample period, which may be consistent with increased director workloads as well as increased scrutiny. We also find that overcompensated directors exacerbate agency problems and lead to reduced CEO turnover sensitivity to performance and a decrease in CEO pay-for-performance sensitivity. Thus, director excess compensation may be a sign of board entrenchment where overcompensated directors are not necessarily focused on protecting shareholder interests. en_US
dc.language.iso en en_US
dc.title Is board compensation excessive? en_US
dc.type Article en_US
dc.description.version Published en_US
dc.author.school SOB en_US
dc.author.idnumber 200104725 en_US
dc.author.department Department of Finance and Accounting (FINA) en_US
dc.description.embargo N/A en_US
dc.relation.journal Journal of Corporate Finance en_US
dc.journal.volume 45 en_US
dc.article.pages 566-585 en_US
dc.keywords Director compensation en_US
dc.keywords Board monitoring en_US
dc.identifier.doi https://doi.org/10.1016/j.jcorpfin.2017.06.001 en_US
dc.identifier.ctation Dah, M. A., & Frye, M. B. (2017). Is board compensation excessive?. Journal of Corporate Finance, 45, 566-585. en_US
dc.author.email mustafa.dah@lau.edu.lb en_US
dc.identifier.tou http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php en_US
dc.identifier.url https://www.sciencedirect.com/science/article/pii/S0929119917303589 en_US
dc.author.affiliation Lebanese American University en_US

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