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Remuneration, Retention, and Reputation Incentives for Outside Directors
Open accessAbstract
I study incentives received by outside directors in Fortune 500 firms from compensation, replacement, and the opportunity to obtain other directorships. Previous research has only shown these relations to apply under limited circumstances such as financial distress. Together these incentive mechanisms provide directors with wealth increases of approximately 11 cents per $1,000 rise in firm value. Although smaller than the performance sensitivities of CEOs, outside directors' incentives imply a change in wealth of about $285,000 for a 1 standard deviation (SD) change in typical firm performance. Cross‐sectional patterns of director equity awards conform to agency and financial theories.
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Cited by
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Adams, R. B., Hermalin, B. E., & Weisbach, M. S. (2010) · Journal of Economic Literature · doi:10.1257/jel.48.1.58 · Cited by 2,358
Are red or blue companies more likely to go green? Politics and corporate social responsibility
Di Giuli, A., & Kostovetsky, L. (2014) · Journal of Financial Economics · doi:10.1016/j.jfineco.2013.10.002 · Cited by 1,539
The role of information and financial reporting in corporate governance and debt contracting
Armstrong, C. S., Guay, W. R., & Weber, J. P. (2010) · Journal of Accounting and Economics · doi:10.1016/j.jacceco.2010.10.001 · Cited by 1,494
Are Busy Boards Effective Monitors?
Fich, E. M., & Shivdasani, A. (2012) · Corporate Governance · doi:10.1007/978-3-642-31579-4_10 · Cited by 1,051
SRINIVASAN, S. (2005) · Journal of Accounting Research · doi:10.1111/j.1475-679x.2005.00172.x · Cited by 1,044
Metadata
- Authors
- YERMACK, D.
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 2004-10
- Volume
- 59
- Issue
- 5
- Pages
- 2281-2308
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W3121494871
- Cited by
- 840
- References
- 0
- FWCI
- 100.61
- Type
- journal article
- Language
- en
- Open access
- green
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