Board influence and CEO power to executive compensation system in American SMEs

Abstract

This study investigated the board influence and CEO power towards determining the CEO compensation system in the American SMEs from 2005 to 2010. The quantitative research method was selected for this research study. The forty small to medium-sized companies were selected through a stratified sampling method. The research question for this research study was: what relationship is there between the board influence, CEO power, and CEO cash compensation, in the American SMEs. The results found that, there was a relationship between the board influence, CEO power, and CEO salary. However, the results also found that there was no relationship between the board influence, CEO power, and bonus. The correlations between the board influence, CEO power, CEO salary were characterized as weak, indication of the complexity of the executive compensation factors and external and internal environments surrounding the American SMEs.