CEO Compensation and Board Structure Revisited

Katherine Guthrie, Jan Sokolowsky, Kam Ming Wan

Research output: Journal article publicationJournal articleAcademic researchpeer-review

115 Citations (Scopus)


Chhaochharia and Grinstein estimate that CEO pay decreases 17% more in firms that were not compliant with the recent NYSE/Nasdaq board independence requirement than in firms that were compliant. We document that 74% of this magnitude is attributable to two outliers of 865 sample firms. In addition, we find that the compensation committee independence requirement increases CEO total pay, particularly in the presence of effective shareholder monitoring. Our evidence casts doubt on the effectiveness of independent directors in constraining CEO pay as suggested by the managerial power hypothesis.
Original languageEnglish
Pages (from-to)1149-1168
Number of pages20
JournalJournal of Finance
Issue number3
Publication statusPublished - 1 Jun 2012

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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