The association between bank performance, board independence, and CEO pay‐performance sensitivity
Abstract
Outlines previous research on the links between board composition, firm performance and chief executive officer (CEO) compensation, and presents a study of CEO pay‐performance sensitivity, board independence and performance in the US banking industry. Explains the methodology and presents the results, suggesting that for large bank holding companies with average performance, increased board independence reduces pay‐performance sensitivity because internal monitoring is sufficient without extra alignment incentives. Adds that when performance is poor this no longer holds true and compensation contracts are then used to align the interests of managers and shareholders.
Keywords
Citation
Mishra, C.S. and Nielsen, J.F. (1999), "The association between bank performance, board independence, and CEO pay‐performance sensitivity", Managerial Finance, Vol. 25 No. 10, pp. 22-33. https://doi.org/10.1108/03074359910766208
Publisher
:MCB UP Ltd
Copyright © 1999, MCB UP Limited