CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK?

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...

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Detalhes bibliográficos
Autores: Goergen, Marc, Chen, Jie, Sau Leung, Woon, Song, Wei
Tipo de documento: artigo
Data de publicação:2019
País:España
Recursos:IE
Repositório:Repositorio IE
OAI Identifier:oai:repositorio.ie.edu:20.500.14417/3649
Acesso em linha:https://doi.org/10.1016/j.jbankfin.2019.03.019
https://hdl.handle.net/20.500.14417/3649
Access Level:Acceso aberto
Palavra-chave:Agency problems
Director compensation
CEO turnover
Institutional investors
Board effectiveness
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repository_id_str
spelling CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK?Goergen, MarcChen, JieSau Leung, WoonSong, WeiAgency problemsDirector compensationCEO turnoverInstitutional investorsBoard effectivenessThis 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.yesPublishedElsevierhttps://ror.org/02jjdwm75202520252019info:eu-repo/semantics/articleapplication/pdfapplication/pdfhttps://doi.org/10.1016/j.jbankfin.2019.03.019https://hdl.handle.net/20.500.14417/3649reponame:Repositorio IEinstname:IEInglésIE Business SchoolIE UniversityFinanceAttribution-NonCommercial-NoDerivatives 4.0 Internationalhttps://creativecommons.org/licenses/by-nc-nd/4.0/deed.eninfo:eu-repo/semantics/openAccessoai:repositorio.ie.edu:20.500.14417/36492026-06-15T12:40:57Z
dc.title.none.fl_str_mv CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK?
title CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK?
spellingShingle CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK?
Goergen, Marc
Agency problems
Director compensation
CEO turnover
Institutional investors
Board effectiveness
title_short CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK?
title_full CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK?
title_fullStr CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK?
title_full_unstemmed CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK?
title_sort CEO and director compensation, CEO turnover and institutional investors: Is there cronyism in the UK?
dc.creator.none.fl_str_mv Goergen, Marc
Chen, Jie
Sau Leung, Woon
Song, Wei
author Goergen, Marc
author_facet Goergen, Marc
Chen, Jie
Sau Leung, Woon
Song, Wei
author_role author
author2 Chen, Jie
Sau Leung, Woon
Song, Wei
author2_role author
author
author
dc.contributor.none.fl_str_mv https://ror.org/02jjdwm75
dc.subject.none.fl_str_mv Agency problems
Director compensation
CEO turnover
Institutional investors
Board effectiveness
topic Agency problems
Director compensation
CEO turnover
Institutional investors
Board effectiveness
description 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.
publishDate 2019
dc.date.none.fl_str_mv 2019
2025
2025
dc.type.none.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv https://doi.org/10.1016/j.jbankfin.2019.03.019
https://hdl.handle.net/20.500.14417/3649
url https://doi.org/10.1016/j.jbankfin.2019.03.019
https://hdl.handle.net/20.500.14417/3649
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv IE Business School
IE University
Finance
dc.rights.none.fl_str_mv Attribution-NonCommercial-NoDerivatives 4.0 International
https://creativecommons.org/licenses/by-nc-nd/4.0/deed.en
info:eu-repo/semantics/openAccess
rights_invalid_str_mv Attribution-NonCommercial-NoDerivatives 4.0 International
https://creativecommons.org/licenses/by-nc-nd/4.0/deed.en
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
application/pdf
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv reponame:Repositorio IE
instname:IE
instname_str IE
reponame_str Repositorio IE
collection Repositorio IE
repository.name.fl_str_mv
repository.mail.fl_str_mv
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