Network connections, CEO compensation and involuntary turnover : The impact of a friend of a friend
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 220-244 |
| Journal / Publication | Journal of Corporate Finance |
| Volume | 45 |
| Online published | 5 May 2017 |
| Publication status | Published - Aug 2017 |
Link(s)
Abstract
We show that hard to observe, indirect connections between a CEO and “independent” board members are associated with higher CEO compensation. While we find this result for the “friend of a friend” connection, we do not find it for direct connections, i.e. friends sitting on the board. We postulate that this differential result is caused by directors with readily observable connections to the CEO being wary of provoking outrage. In contrast we find both types of connections associated with reduced involuntary CEO turnover, suggesting that outrage is not as big a concern, e.g., compensation is the foci of stakeholders.
Research Area(s)
- CEO compensation, CEO turnover, Connections, Direct connections, Indirect connections
Bibliographic Note
Research Unit(s) information for this publication is provided by the author(s) concerned.
Citation Format(s)
Network connections, CEO compensation and involuntary turnover : The impact of a friend of a friend. / Balsam, Steven; Kwack, So Yean; Lee, Jae Young.
In: Journal of Corporate Finance, Vol. 45, 08.2017, p. 220-244.Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
