Director Self-Dealing + the Design of Compensation Contracts
Jul 3, 2022 7:24:57 GMT 4
anenro likes this
Post by Sapphire Capital on Jul 3, 2022 7:24:57 GMT 4
Director Self-Dealing and the Design of Compensation Contracts
INSEAD Working Paper No. 2022/28/FIN
39 Pages Posted: 15 Jun 2022
Lily H. Fang
INSEAD - Finance
Sterling Huang
Singapore Management University - School of Accountancy
Multiple version iconThere are 2 versions of this paper
Date Written: June 15, 2022
Abstract
In 2020, the average total director compensation in U.S. listed companies stood at $450,680, 6.67 times the median household income. Company pairs with shared directors have more similar pay than can be explained by size, industry, and performance. Following a landmark Delaware court ruling that required more accountability of director pay, Delaware-incorporated firms reduced total director compensation relative to other firms. The ruling was associated with positive, non-transient stock price reactions for Delaware-incorporated firms. Collectively, our results indicate that holding directors more accountable of their compensation enhances firm value.
SSRN-id4137132.pdf (968.83 KB)
INSEAD Working Paper No. 2022/28/FIN
39 Pages Posted: 15 Jun 2022
Lily H. Fang
INSEAD - Finance
Sterling Huang
Singapore Management University - School of Accountancy
Multiple version iconThere are 2 versions of this paper
Date Written: June 15, 2022
Abstract
In 2020, the average total director compensation in U.S. listed companies stood at $450,680, 6.67 times the median household income. Company pairs with shared directors have more similar pay than can be explained by size, industry, and performance. Following a landmark Delaware court ruling that required more accountability of director pay, Delaware-incorporated firms reduced total director compensation relative to other firms. The ruling was associated with positive, non-transient stock price reactions for Delaware-incorporated firms. Collectively, our results indicate that holding directors more accountable of their compensation enhances firm value.
SSRN-id4137132.pdf (968.83 KB)