Endogenously Chosen Boards of Directors and Their Monitoring of the CEO

  • Albuquerque A
  • De Franco G
  • Verdi R
 et al. 
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Abstract

The use of equity incentives is significantly greater in countries with stronger insider trading restrictions, and these higher incentives are associated with higher total pay. These findings are robust to alternative definitions of insider trading restrictions and enforcement, and to panel regressions with country fixed effects. We also find significant increases in top executive pay and the use of equity-based incentives in the period immediately following the initial enforcement of insider trading laws. We conclude that insider trading laws are one channel through which cross-country differences in pay practices can be explained. ?? 2013 Elsevier B.V.

Author-supplied keywords

  • Agency problems
  • Authority
  • Busy boards
  • CROSS-sectional method
  • Communication
  • Compensation
  • Compensation structure
  • Deal-making
  • EMPLOYMENT tenure
  • EXECUTIVE compensation
  • Executive compensation
  • Firm value
  • Incentive compensation
  • Insider ownership
  • Insider trading restrictions
  • JOB performance
  • Joint ventures
  • Knowledge
  • MONETARY incentives
  • Organization
  • Overconfidence
  • PPS
  • SEOs
  • Spin-offs
  • Strategic alliances
  • cooperation
  • firm performance
  • icle
  • team incentive dispersion

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Authors

  • Ana M. Albuquerque

  • Gus De Franco

  • Rodrigo S. Verdi

  • Lucian Arye Bebchuk

  • Jesse M Fried

  • John M. Bizjak

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