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Why Do Board Members Receive Excess Compensation?

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  • Hsiu‐I Ting

Abstract

This paper examines compensation to the boards of directors and supervisors for a sample of 656 firms over the period 1999–2008. I find in Taiwan that about 53.21% of firms pay excess compensation to their boards and 13.72% of the boards are overpaid by more than 50%. This paper conjectures that firms reward directors and supervisors in order to retain their valuable human capital and notes a robust positive effect of excess compensation on future firm performance. Because directors and supervisors are rewarded for future success, their excess pay may not be considered all that bad. Copyright © 2015 John Wiley & Sons, Ltd.

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  • Hsiu‐I Ting, 2016. "Why Do Board Members Receive Excess Compensation?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 37(8), pages 552-562, December.
    • Handle: RePEc:wly:mgtdec:v:37:y:2016:i:8:p:552-562
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    Cited by:

    1. Fernando Núñez & Ángel Arcos-Vargas & Carlos Usabiaga & Pablo Álvarez-de-Toledo, 2022. "On directors’ compensation: a multilevel analysis of Spanish listed companies," Empirical Economics, Springer, vol. 63(4), pages 2173-2207, October.

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