The impact of family control on the top management compensation mix and incentive orientation

Chao-Jung Chen, Chung-Yuan Hsu and Yu-Lin Chen

International Review of Economics & Finance, 2014, vol. 32, issue C, 29-46

Abstract: This study investigates the impact of the central agency problem on the top management compensation mix and incentive orientation in family-controlled firms. Our empirical evidence demonstrates that family-controlled firms offer a lower proportion of variable compensation to total compensation to their top management than non-family firms. Additionally, family-controlled firms with central agency problems provide their top management with higher proportions of cash compensation in their compensation packages than do family-controlled firms without central agency problems in non-electronic industries. This research provides new insights into how family-controlled firms utilize compensation mix and the temporal orientation of incentives to deal with agency problems.

Keywords: Traditional agency problem; Central agency problem; Family control; Top management compensation mix; Incentive orientation (search for similar items in EconPapers)
JEL-codes: G34 J33 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:32:y:2014:i:c:p:29-46

DOI: 10.1016/j.iref.2014.01.005

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