CEO Compensation and Board Structure Revisited

Katherine Guthrie, Jan Sokolowsky, Kam Ming Wan*

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

112 Citations (Scopus)


Chhaochharia and Grinstein estimate that CEO pay decreases 17% more in firms that were not compliant with the recent NYSE/Nasdaq board independence requirement than in firms that were compliant. We document that 74% of this magnitude is attributable to two outliers of 865 sample firms. In addition, we find that the compensation committee independence requirement increases CEO total pay, particularly in the presence of effective shareholder monitoring. Our evidence casts doubt on the effectiveness of independent directors in constraining CEO pay as suggested by the managerial power hypothesis.

Original languageEnglish
Peer-reviewed scientific journalJournal of Finance
Issue number3
Pages (from-to)1149-1168
Number of pages20
Publication statusPublished - 01.06.2012
MoE publication typeA1 Journal article - refereed


  • 511 Economics


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