TY - JOUR
T1 - Institutional ownership and CEO compensation
T2 - A longitudinal examination
AU - Khan, Raihan
AU - Dharwadkar, Ravi
AU - Brandes, Pamela
N1 - Funding Information:
The data used in this study was partially funded by the Michael J. Falcone Center for Entrepreneurship at Syracuse University.
Copyright:
Copyright 2005 Elsevier B.V., All rights reserved.
PY - 2005/8
Y1 - 2005/8
N2 - Limited research has looked at how the aspects of institutional ownership affect executive compensation. Using an agency theory approach, we investigate how institutional ownership concentration and dispersion affect levels of CEO compensation, pay mix, and stock option pay sensitivity. We find that the largest owner's concentration is associated with lower levels of compensation, as well as with higher ratios of salary to total compensation and lower ratios of options to total compensation, but that the number of blockholders does not predict any aspects of CEO compensation. In addition, institutional ownership dispersion is associated with increased levels of compensation and greater use of incentive compensation. Finally, higher levels of CEO ownership lead to a significant reduction in the level of options compensation, as well as higher ratios of salary to total compensation and lower ratios of options to total compensation.
AB - Limited research has looked at how the aspects of institutional ownership affect executive compensation. Using an agency theory approach, we investigate how institutional ownership concentration and dispersion affect levels of CEO compensation, pay mix, and stock option pay sensitivity. We find that the largest owner's concentration is associated with lower levels of compensation, as well as with higher ratios of salary to total compensation and lower ratios of options to total compensation, but that the number of blockholders does not predict any aspects of CEO compensation. In addition, institutional ownership dispersion is associated with increased levels of compensation and greater use of incentive compensation. Finally, higher levels of CEO ownership lead to a significant reduction in the level of options compensation, as well as higher ratios of salary to total compensation and lower ratios of options to total compensation.
KW - Corporate governance
KW - Executive compensation
KW - Institutional ownership
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U2 - 10.1016/j.jbusres.2004.02.002
DO - 10.1016/j.jbusres.2004.02.002
M3 - Article
AN - SCOPUS:12344281216
SN - 0148-2963
VL - 58
SP - 1078
EP - 1088
JO - Journal of Business Research
JF - Journal of Business Research
IS - 8
ER -