Chen, J orcid.org/0000-0002-4076-7121, Goergen, M, Leung, WS et al. (1 more author) (2019) CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK? Journal of Banking & Finance, 103. pp. 18-35. ISSN 0378-4266
Abstract
This paper provides new evidence that correlated abnormal compensation of CEOs and directors is symptomatic of agency problems associated with cronyism. We find that director abnormal compensation has a negative impact on the likelihood of CEO turnover and reduces the sensitivity of CEO turnover to poor stock performance. However, for firms with greater institutional ownership the adverse effects of director abnormal compensation are mitigated, and the negative impact of abnormal compensation on firm performance is reduced. These findings suggest that correlated abnormal compensation of CEOs and directors is likely associated with agency problems.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2019 Elsevier B.V. All rights reserved. This is an author produced version of a paper published in Journal of Banking & Finance. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Agency problems; Director compensation; CEO turnover; Institutional investors; Board effectiveness |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 29 Mar 2019 15:05 |
Last Modified: | 28 Sep 2020 00:40 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.jbankfin.2019.03.019 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:144211 |