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- Title
The Impact of Independent and Overlapping Board Structures on CEO Compensation, Pay-Performance Sensitivity and Accruals Management.
- Authors
Jui-Chin Chang; Mi Luo; Huey-Lian Sun
- Abstract
Due to SOX, new rules that require independent directors on corporate boards and committees are likely to result in overlapping hoard structure (directors serving on more than one committee L The purpose of fit is study is to examine the effects of independent and overlapping board structures on CEO compensation. CEO pay-performance sensitivity, and accruals management Our results support Laux and Laux (2009) that overlapping compensation committees take conservative actions by granting CEOs less equity-based compensation to reduce monitoring cost of financial reporting. However, we do not find that overlapping compensation committees have any effect on CEO pen-performance sensitivity Furthermore, our results show that SOX might reduce CEOs' risk taking because independent compensation committees grant CEOs more cash-based and less equity-based compensation after SOX. In addition, although SOX improves the independent audit committee's oversight functions, our findings support Laux and Laux (2009) that overlapping audit committees have an association with accruals management.
- Subjects
ECONOMIC impact; CHIEF executive officers; COMPENSATION management; CORPORATE directors; ORGANIZATIONAL performance; ACCRUAL basis accounting; ECONOMIC structure; FINANCIAL statements
- Publication
Quarterly Journal of Finance & Accounting, 2011, Vol 50, Issue 2, p54
- ISSN
1939-8123
- Publication type
Article