RT Journal Article
T1 Public thrift, private perks: signaling board independence with executive pay
A1 Ruiz Verdú, Pablo
A1 Singh, Ravi
AB We analyze how boards' reputational concerns influence executive compensation and the use of hidden pay. Independent boards reduce disclosed pay to signal their independence, but are more likely than manager-friendly boards to use hidden pay or to distort incentive contracts. Stronger reputational pressures lead to lower disclosed pay, weaker managerial incentives, and higher hidden pay, whereas greater transparency of executive compensation has the opposite effects. Although reputational concerns can induce boards to choose compensation contracts more favorable to shareholders, we show that there is a threshold beyond which stronger reputational concerns harm shareholders. Similarly, excessive pay transparency can harm shareholders.
PB Wiley
SN 0022-1082
YR 2021
FD 2021-04-01
LK https://hdl.handle.net/10016/34639
UL https://hdl.handle.net/10016/34639
LA eng
NO Pablo Ruiz-Verdú acknowledges the financial support of Spain’s Ministry of Science, Innovation and Universities, the State Research Agency, and FEDER (through grant PGC2018-097187-B-I00), Madrid’s Autonomous Community(through grant EARLYFIN-CM, #S2015/HUM-3353), and Spain’s Ministry of Economy and Competitiveness (through grant ECO2015-69615-R).
DS e-Archivo
RD 27 jul. 2024