The Effect of Internationalization On CEO-Compensation

Lars Oxelheim and Trond Randøy ()
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Trond Randøy: School of management Agder University College, Postal: School of management Agder University College, Bygg H, Serviceboks 422, N-4604, Kristiansand, Norway

No 2002/4, Working Paper Series from Lund University, Institute of Economic Research

Abstract: This study addresses how firms’ internationalization affects CEO compensation. Based on a sample of Swedish listed firms we analyze the effect of internationalization through the product market (export), the capital market (foreign exchange listing), and the corporate governance market (foreign board membership). We find that internationalization with respect to the capital market and the corporate governance market strengthens the relationship between product market internationalization and CEO compensation. A higher degree of internationalization - via the capital and corporate governance markets - is found to be associated with shorter CEO tenure. We argue that part of the higher CEO compensation in international oriented firms reflects a risk premium for harsher monitoring and thus lower job security.

Keywords: CEO compensation; internationalization; corporate governance; Sweden (search for similar items in EconPapers)
Pages: 21 pages
Date: 2002-12-17
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Citations: View citations in EconPapers (3)

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Working Paper: The Effects of Internationalization on CEO Compensation (2004)
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