On the compensation and activity of corporate boards

Nga Q. Nguyen

Journal of Corporate Finance, 2014, vol. 29, issue C, 1-19

Abstract: Within the nexus of contracts that makes up the firm, relatively little is known about the relationship between firms and their directors. Using a unique dataset comprising director compensation and activity, I find that firms use meeting fees and equity-based compensation as substitutes. In addition, paying directors for attending board/committee meetings is associated with more active boards and more active monitoring and advising committees. In contrast, a higher proportion of equity-based compensation is positively associated with monitoring activity but negatively associated with advising activity. Furthermore, more active boards and committees are paid more. Finally, I find that the variation in director compensation and activity generally reflects trade-offs between the costs and benefits of director effort, consistent with prior work.

Keywords: Corporate boards; Director compensation; Director activity; Contracting (search for similar items in EconPapers)
JEL-codes: G30 G34 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:29:y:2014:i:c:p:1-19

DOI: 10.1016/j.jcorpfin.2014.06.004

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