Are CEOs in family firms paid like bureaucrats? Evidence from Bayesian and frequentist analyses

Jörn Hendrich Block

No 2008-033, SFB 649 Discussion Papers from Humboldt University Berlin, Collaborative Research Center 649: Economic Risk

Abstract: The relationship between CEO pay and performance has been much analyzed in the management and economics literature. This study analyzes the structure of executive compensation in family and non-family firms. In line with predictions of agency theory, it is found that the share of base salary is higher with family-member CEOs than it is with nonfamily member CEOs. Furthermore, family-member CEOs receive a lower share of option pay. The paper's findings have implications for family business research and the executive compensation literature. To make the findings robust, the statistical analysis is performed with both Bayesian and classical frequentist methods.

Keywords: Executive compensation; family firms; stock options; agency theory; Bayesian analysis (search for similar items in EconPapers)
JEL-codes: G30 J30 M52 (search for similar items in EconPapers)
Date: 2008
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