CEO CHARACTERISTICS AND COMPENSATION: A CHANNEL ANALYSIS OF U.S. LISTED FIRMS

Cosmin Enache, Claudiu Boțoc and Sorin Gabriel Anton
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Cosmin Enache: West University of Timişoara, Romania
Claudiu Boțoc: West University of Timişoara, Romania
Sorin Gabriel Anton: Alexandru Ioan Cuza University of Iaşi, Romania

Studies in Business and Economics, 2025, vol. 20, issue 2, 98-112

Abstract: The empirical exploration of executive compensation determinants has been a focal point within scholarly inquiry. In this study, we address this gap by analyzing a dataset comprising 1,659 publicly listed U.S. firms spanning from 2006 to 2015. Our investigation draws upon data sourced from Compustat, Execucomp, and BoardEx, encompassing financial indicators, corporate governance metrics, executive compensation data, and CEO background information. Our findings reveal a positive association between director network size, serving as a proxy for "relationship capital," and executive compensation levels. Moreover, we provide empirical evidence for a negative correlation between gender and executive compensation within our U.S. firm sample. Unexpectedly, we observe that neither experience nor age demonstrates statistically significant impacts on executive compensation. Consistent with established literature, our analysis confirms a positive link between accounting performance metrics and executive compensation. Importantly, our empirical findings withstand rigorous tests across various subsamples, econometric methodologies, and CEO compensation variables, bolstering the robustness and reliability of our results. Furthermore, we analyze the possible transmission channels through which the CEO's background enhances executive compensation. Our paper contributes to the extant literature by highlighting the importance of “relationship capital” for executive compensation and the role of transmission channels.

Keywords: Executive compensation; performance; relationship capital; corporate governance; channel analysis (search for similar items in EconPapers)
Date: 2025
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