Three Essays on Compensation and the Board of Directors

Download or read book Three Essays on Compensation and the Board of Directors written by Ian Cherry and published by . This book was released on 2015 with total page 118 pages. Available in PDF, EPUB and Kindle. Book excerpt: My second essay concerns the compensation of directors themselves. I find that institutional ownership is positively related to the level of director compensation and the proportion of equity based compensation that directors receive. These results are consistent with the interpretation that institutions prefer stronger links between firm performance and board compensation and are willing to pay higher levels of compensation for better governance. I also investigate the difference between the effects of active versus passive institutional investment and find that active institutions appear to have a larger economic impact on director compensation. However, I do not find a statistical difference between the effects of active and passive ownership.