TY - JOUR
T1 - Not Clawing the Hand that Feeds You
T2 - The Case of Co-opted Boards and Clawbacks
AU - Huang, Sterling
AU - Lim, Chee Yeow
AU - Ng, Jeffrey
PY - 2019/1/1
Y1 - 2019/1/1
N2 - We examine how board co-option, defined as the fraction of the board comprising directors appointed after the CEO assumed office, is related to clawback adoption. We find that co-opted boards have a lower probability of adopting clawback provisions. Further, the negative association between board co-option and clawback adoption is more pronounced when at least one co-opted member is on the compensation committee and when there is a higher likelihood that a clawback provision will be triggered. Finally, we find that board co-option is an important mechanism through which longer tenured CEOs reduce the likelihood of clawback adoption.
AB - We examine how board co-option, defined as the fraction of the board comprising directors appointed after the CEO assumed office, is related to clawback adoption. We find that co-opted boards have a lower probability of adopting clawback provisions. Further, the negative association between board co-option and clawback adoption is more pronounced when at least one co-opted member is on the compensation committee and when there is a higher likelihood that a clawback provision will be triggered. Finally, we find that board co-option is an important mechanism through which longer tenured CEOs reduce the likelihood of clawback adoption.
UR - http://www.scopus.com/inward/record.url?scp=85042934682&partnerID=8YFLogxK
U2 - 10.1080/09638180.2018.1446036
DO - 10.1080/09638180.2018.1446036
M3 - Journal article
AN - SCOPUS:85042934682
SN - 0963-8180
VL - 28
SP - 101
EP - 127
JO - European Accounting Review
JF - European Accounting Review
IS - 1
ER -