John E Core - John E Core; Robert W. Holthaus; David F....

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John E Core; Robert W. Holthaus; David F. Larcker : Corporate governance, chief executive officer compensation, and firm performance Abstract: - Measures of board ownership structure explain a significant amount of cross- sectional variation in CEO compensation - Variables suggest, that CEOs earn greater compensation when governance structures are less effective - The predicted component of compensation arising from these characteristics of board and ownership structure has a statistically significant negative relation with subsequent firm operating and stock return performance - Overall the results suggest that firms with weaker governance structures have greater agency problems - CEOs at firms with greater agency problems receive greater compensation - Firms with greater agency problems perform worse Introduction: - Critics of CEO compensation practice argue that because the board of directors is influenced by the CEO, the board does not structure CEOs compensation package to maximize value for outside shareholders - We find that both, board-of-director characteristics and ownership structure have a
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John E Core - John E Core; Robert W. Holthaus; David F....

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