Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10226886 | Research in International Business and Finance | 2018 | 52 Pages |
Abstract
Using international data from 49 countries, we examine how director busyness affects global compensation. Prior literature reports conflicting evidence regarding the effect that multiple directorships has on firm value and performance. Some studies find that busy directors have skills and connections that benefit the firm while other research concludes that busy directors are too distracted to provide adequate monitoring. We determine that busy directors receive higher total compensation which is consistent with their greater skills and extensive networks. Busy directors, however, receive a significantly higher percentage of equity-based compensation which is consistent with their limited time for monitoring. This compensation structure is associated with improved market-to-book ratios, ROA, and profit margins. Finally, we discover that compensation committee members do not receive higher total compensation, but a lower percentage is equity linked.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Business and International Management
Authors
Stephen P. Ferris, Min-Yu (Stella) Liao, Chris Tamm,