Who monitors the monitor? the effect of board independence on executive compensation and firm value

Review of Financial Studies

Volumn 21, Issue 3, 2008, Pages 1371-1401

  Kumar, Praveen ^a,b   Sivaramakrishnan, K ^a  

^a UNIVERSITY OF HOUSTON   (United States)

^b UNIVERSITY OF HOUSTON   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 44849123229     PISSN: 08939454     EISSN: 14657368     Source Type: Journal    
DOI: 10.1093/rfs/hhn010     Document Type: Article

References (35)

1. Anand, S. 2005. Under New Rules, Investors Are Owed Some Explanations. Wall Street Journal, July 8, p. C1.
2. Ausubel, L., and R. Deneckere. 1989. A Direct Mechanism Characterization of Sequential Bargaining with One-Sided Incomplete Information. Journal of Economic Theory 48:18.
3. Bainbridge, S. 2002. A Critique of NYSE's Director Independence Listing Standards. Research Paper, UCLA School of Law.
4. Bebchuk, L., and J. Fried. 2004. Pay Without Performance. Cambridge, MA: Harvard University Press.
5. Bernheim, B., and M. Whinston. 1986. Common Agency. Econometrica 54:355-72.
6. Black, B. 2000. The Fiduciary Duties of Outside Directors. Working Paper, Stanford University.
7. Black, B., and S. Bhagat. 2002. The Non-Correlation Between Board Independence and Long-Term Firm Performance. Journal of Corporation Law 27:231-74.
8. Brickley, J., J. Coles, and R. Terry. 1994. The Board of Directors and the Enactment of Poison Pills. Journal of Financial Economics 35:371-90.
9. Byrne, J. 1996. The Best and Worst Boards. Business Week, November 25, pp. 82-91.
10. Conference Board. 2002. Directors' Compensation and Board Practices in 2002. Reseach Report. New York: Conference Board.
11. Crystal, G. 1991. In Search of Excess: The Overcompensation of American Executives. New York: W.W. Norton.
12. Faynzilberg, P., and P. Kumar. 1997. Optimal Contracting of Separable Production Technologies. Games and Economic Behavior 21:15-39.
13. Faynzilberg, P., and P. Kumar. 2000. On the Structure of the Generalized Principal-Agent Problem: Decomposition and Existence Results. Review of Economic Design 5:23-58.
14. Fitch, E., and L. White. 2001. Why Do CEOs Reciprocally Sit on Each Other's Boards? Working Paper, New York University.
15. Fluck, Z. 1998. Optimal Financial Contracting: Debt vs. Outside Equity. Review of Financial Studies 11:383-418.
16. Gabrielle, M. 2001. Outside Board Members Earning Record Sums. CFO Magazine, February.
17. Harris, M., and A. Raviv. 1979. Optimal Incentive Contracts with Imperfect Information. Journal of Economic Theory 20:231-60.
18. Harris, M., and A. Raviv. forthcoming. A Theory of Board Control and Size. Review of Financial Studies.
19. Hart, O. 1995. Firm, Contracts, and Financial Structure. London: Oxford University Press.
20. Hermalin, B., and M. Weisbach. 1998. Endogenously Chosen Boards of Directors and Their Monitoring of the CEO. American Economic Review 88:96-118.
21. Ma, C., J. Moore, and S. Turnbull. 1988. Stopping Agents from Cheating. Journal of Economic Theory 46:255-72.
22. Main, B., C. O'Reilly, and J. Wade. 1995. The CEO, the Board of Directors, and Executive Compensation: Economic and Psychological Perspectives. Industrial and Corporate Change 11:292-332.
23. McGeehan, P. 2003. What Is the Boss Making? New York Times, September 21, Sec. 3, p. 1.
24. Mills, C. 2000. The Power Elite. New York: Oxford University Press.
25. Morgensen, G. 2005. Charity Begins at the Board. New York Times, April 10.
26. Myers, S. 2000. Outside Equity. Journal of Finance 55:1005-37.
27. Myerson, R. 1982. Optimal Coordination Mechanisms in Generalized Principal-Agent Problems. Journal of Mathematical Economics 10:67-81.
28. Pearl Meyer & Partners. 2005. Director Compensation Report. New York. Available at http://www. pearlmeyer.com/resdir.html. Accessed June 7, 2006.
29. Rubinstein, A. 1982. Perfect Equilibrium in a Bargaining Model. Econometrica 50:97-109.
30. Rubinstein, A. 1985. A Bargaining Model with Incomplete Information about Time Preference. Econometrica 53:1151-72.
31. Shivdasani, A., and D. Yermack. 1999. CEO Involvement in the Selection of New Board Members: An Empirical Analysis. Journal of Finance 54:1829-53.
32. Stulz, R. 1990. Managerial Discretion and Optimal Financing Policies. Journal of Financial Economics 26:3-27.
33. Van Den Berghe, L., and A. Levrau. 2004. Evaluating Boards of Directors: What Constitutes a Good Corporate Board? Corporate Governance: An International Review 12:461-78.
34. Yermack, D. 1996. Higher Market Valuation for Firms with a Small Board of Directors. Journal of Financial Economics 40:185-211.
35. Zajac, E., and J. Westphal. 1996. Who Shall Govern? CEO-Board Power and the Dynamics of Board Interlocks. Administrative Science Quarterly 41:507-29.