Does CEO Power Affect the Association Between CEO Compensation and Tangible Assets Impairments?

Kin-Wai Lee, Cheng-Few Lee () and Gillian Hian-Heng Yeo ()
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Kin-Wai Lee: Nanyang Business School, Nanyang Technological University Singapore, 50 Nanyang Avenue, Singapore 639798, Singapore
Cheng-Few Lee: Rutgers University, Room 5188, 100 Rockefeller Road Piscataway, NJ 08854, United States of America
Gillian Hian-Heng Yeo: Nanyang Business School, Nanyang Technological University Singapore, 50 Nanyang Avenue, Singapore 639798, Singapore
Authors registered in the RePEc Author Service: Cheng Few Lee

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2021, vol. 24, issue 01, 1-26

Abstract: This paper examines the association between CEO compensation and tangible long-lived assets impairment. We find that the level of CEO compensation is negatively associated with the tangible long-lived assets impairment charges. We also document that in firms with CEOs who have more decision-making power, the negative association between CEO compensation and tangible long-lived assets impairment charges is mitigated. Specifically, the negative association between CEO compensation and tangible long-lived assets impairment charges is less pronounced (1) when CEO chairs the board, (2) when CEO is the founder of the firm, (3) when the CEO is involved in the director selection process, and (4) when overall board independence is low.

Keywords: CEO compensation; assets impairment; corporate governance (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1142/S0219091521500053

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