The effect of compensation committee quality on the association between CEO cash compensation and accounting performance

Corporate Governance: An International Review

Volumn 17, Issue 2, 2009, Pages 193-207

  Sun, Jerry ^a   Cahan, Steven ^b  

^a UNIVERSITY OF WINDSOR   (Canada)

^b UNIVERSITY OF AUCKLAND   (New Zealand)

Author keywords

Compensation Committee; Corporate Governance; Evaluation of Directors; Executive Compensation

Indexed keywords

EID: 62249204393     PISSN: 09648410     EISSN: 14678683     Source Type: Journal    
DOI: 10.1111/j.1467-8683.2008.00726.x     Document Type: Article

References (63)

1. Adams, R. Mehran, H. (2002) Board Structure and Banking Firm Performance. Working paper, Federal Reserve Bank of New York.
2. Adut, D., Cready, W. H. Lopez, T. J. (2003) Restructuring charges and CEO cash compensation: A re-examination, The Accounting Review, 78 (1 169 93.
3. Agrawal, A. Knoeber, R. (1999) Outside Directors, Politics, and Firm Performance. Working paper, North Carolina State University.
4. Agrawal, A. Mandelker, G. N. (1990) Large shareholders and the monitoring of managers: The case of antitakeover charter amendments, Journal of Financial and Quantitative Analysis, 25 (2 143 61.
5. Anderson, R. C. Bizjak, J. M. (2003) An empirical examination of the role of the CEO and the compensation committee in structuring executive pay, Journal of Banking and Finance, 27 (7 1323 48.
6. Baker, M. Gompers, P. A. (2003) The determinants of board structure at the initial public offering, Journal of Law and Economics, 46 : 569 98.
7. Barclay, M. Smith, C. W. (1995a) The maturity structure of corporate debt, Journal of Finance, 50 : 609 32.
8. Barclay, M. Smith, C. W. (1995b) The priority structure of corporate liabilities, Journal of Finance, 50 : 609 32.
9. Bathala, C. T. Rao, R. P. (1995) The determinants of board composition: An agency theory perspective, Managerial and Decision Economics, 16 : 59 69.
10. Beasley, M. S. (1996) An empirical analysis of the relation between the board of director composition and financial statement fraud, The Accounting Review, 71 : 443 65.
11. Bebchuk, L. A. Fried, J. M. (2003) Executive compensation as an agency problem, Journal of Economic Perspectives, 17 : 71 92.
12. Bebchuk, L. A., Fried, J. M. Walker, D. I. (2002) Managerial power and rent extraction in the design of executive compensation, University of Chicago Law Review, 69 : 751 846.
13. Bedard, J., Coulombe, D. Courteau, L. (2008) Audit committee, underpricing of IPOs, and accuracy of management earnings forecasts, Corporate Governance: An International Review, 16 (6 510 35.
14. Bender, R. (2007) Onwards and upwards: Why companies change their executive remuneration schemes, and why this leads to increases in pay, Corporate Governance: An International Review, 15 (5 709 23.
15. Brickley, J., Lease, R. C. Smith, C. W., Jr. 1988). Ownership structure and voting on anti-takeover amendments, Journal of Financial Economics, 1988 : 267 91.
16. Brickley, J., Linck, J. Coles, J. (1999) What happens to CEOs after they retire? New evidence on career concerns, horizon problems, and CEO incentives, Journal of Financial Economics, 52 : 341 77.
17. Buchanan, B. (1974) Building organizational commitment: The socialization of managers in work organizations, Administrative Science Quarterly, 19 : 533 46.
18. Bushman, R., Chen, Q., Engel, E. Smith, A. (2004) Financial accounting information, organizational complexity, and corporate governance systems, Journal of Accounting and Economics, 37 : 167 201.
19. Carcello, J. V. Neal, T. L. (2000) Audit committee composition and auditor reporting, The Accounting Review, 75 : 453 67.
20. Carcello, J. V. Neal, T. L. (2003) Audit committee characteristics and auditor dismissals following "new" going concern reports, The Accounting Review, 78 : 95 116.
21. Chan, K. C. Li, J. (2008) Audit committee and firm value: Evidence on outside top executives as expert-independent directors, Corporate Governance: An International Review, 16 (1 16 31.
22. Comprix, J. Mueller, K. A. (2006) Asymmetric treatment of reported pension expense and income amounts in CEO cash compensation, Journal of Accounting and Economics, 42 (3 385 416.
23. Core, J., Holthausen, R. Larcker, D. (1999) Corporate governance, chief executive officer compensation, and firm performance, Journal of Financial Economics, 51 : 151 84.
24. Daily, C. M., Johnson, J. L., Ellstrand, A. E. Dalton, D. R. (1998) Compensation composition as a determinants of CEO compensation, Academy of Management Journal, 41 (2 209 20.
25. Dechow, P. M., Huson, M. R. Sloan, R. G. (1994) The effect of restructuring charges on executives' cash compensation, The Accounting Review, 69 (1 138 56.
26. Defeo, V., Lambert, R. Larcker, D. (1989) Executive compensation effects of equity-for-debt swaps, The Accounting Review, 64 : 201 28.
27. Fama, E. (1980) Agency problems and the theory of the firm, Journal of Political Economy, 88 : 288 307.
28. Fama, E. Jensen, M. (1983) The separation of ownership and control, Journal of Law and Economics, 26 : 301 25.
29. Fich, E. M. Shivdasani, A. (2006) Are busy boards effective monitors Journal of Finance, 61 : 689 724.
30. Frankel, R., Kothari, S. P. Weber, J. (2006) Determinants of the informativeness of analyst research, Journal of Accounting and Economics, 41 : 29 54.
31. Gaver, J. J. Gaver, K. M. (1998) The relation between nonrecurring accounting transactions and CEO cash compensation, The Accounting Review, 73 (April 235 53.
32. Greene, W. (2000) Econometric Analysis, 4th edn., Prentice-Hall, Upper Saddle River, NJ.
33. Hanlon, M., Rajgopal, S. Shevlin, T. (2003) Are executive stock options associated with future earnings? Journal of Accounting and Economics, 36 : 3 43.
34. Harford, J. (2003) Takeover bids and target directors' incentives: The impact on directors wealth and board seats, Journal of Financial Economics, 69 : 51 83.
35. Hayn, C. (1995) The information content of losses, Journal of Accounting and Economics, 20 : 125 53.
36. Hentschel, L. Kothari, S. P. (2001) Are corporations reducing or taking risks with derivatives Journal of Financial and Quantitative Analysis 36 (1 93 118.
37. Holmstrom, B. (1979) Moral hazard and observability, Bell Journal of Economics, 10 : 74 91.
38. Ittner, C. D., Lambert, R. A. Larcker, D. F. (2003) The structure and performance consequences of equity grants to employees of new economy firms, Journal of Accounting and Economics, 34 : 89 127.
39. Jensen, M. C. (1993) The modern industrial revolution, exit, and the failure of internal control, Systems, Journal of Finance, 48 : 831 80.
40. Kaplan, S. Reishus, D. (1990) Outside directorships and corporate performance, Journal of Financial Economics, 27 : 389 410.
41. Klein, A. (2002a) Economic determinants of audit committee independence, The Accounting Review, 77 : 435 52.
42. Klein, A. (2002b) Audit committee, board of director characteristics, and earnings management, Journal of Accounting and Economics, 33 : 375 400.
43. Kieschnick, R. Moussawi, R. (2004) The Board of Directors: A Bargaining Perspective. Working paper. University of Texas at Dallas.
44. Lambert, R. Larcker, D. (1987) An analysis of the use of accounting and market measures of performance in executive compensation contracts, Journal of Accounting Research, 25 : 85 129.
45. Leone, A. J., Wu, J. S. Zimmerman, J. L. (2006) Asymmetric sensitivity of CEO cash compensation to stock returns, Journal of Accounting and Economics, 42 : 167 92.
46. Lipton, M. Lorsch, J. (1992) A modest proposal for improved corporate governance, Business Lawyer, 48 : 59 77.
47. Linck, J. S., Netter, J. M. Yang, T. (2008) The determinants of board structure, Journal of Financial Economics, 87 : 308 28.
48. Lorsch, J. W. MacIver, E. (1989) Pawns or Potentates: The Reality of America's Corporate Boards, Harvard Business School Press, Boston.
49. Morck, R., Shleifer, A. Vishny, R. W. (1988) Management ownership and market valuation: An empirical analysis, Journal of Financial Economics, 20 : 293 315.
50. Murphy, K. (1999). Executive Compensation. Working paper, University of Southern California.
51. Newman, H. A. Mozes, H. A. (1999) Does the composition of the compensation committee influence CEO compensation practices?, Financial Management, 28 (Autumn 41 53.
52. Perry, T. Zenner, M. (2001) Pay for performance? Government regulation and the structure of compensation contracts, Journal of Financial Economics 62 (3 453 88.
53. Rediker, K. Seth, A. (1995) Boards of directors and substitution effects of alternative governance mechanisms, Strategic Management Journal, 16 : 85 99.
54. Salancik, G. (1977) Commitment and Control of Organizational Behavior and Belief, New Directions in Organizational Behavior, St Claire Press, Chicago.
55. Shivdasani, A. (1993) Board composition, ownership structure, and hostile takeovers, Journal of Accounting and Economics, 16 : 167 98.
56. Shivdasani, A. Yermack, D. (1999) CEO involvement in the selection of new board members: an empirical analysis, Journal of Finance, 54 : 1829 53.
57. Sloan, R. G. (1993) Accounting earnings and top executive compensation, Journal of Accounting and Economics, 16 : 55 100.
58. Vafeas, N. (2003a) Further evidence on compensation committee composition as a determinant of CEO compensation, Financial Management, 32 (Summer 53 70.
59. Vafeas, N. (2003b) Length of board tenure and outside director independence, Journal of Business Finance & Accounting, 30 (7/8 1043 64.
60. Vance, S. (1983) Corporate Leadership: Boards, Directors, Strategy, McGraw Hill, New York.
61. Wade, J., O'Reilly, C. A. Chandratat, I. (1990) Golden parachutes: CEOs and the exercise of social influence, Administrative Science Quarterly, 35 : 587 603.
62. Williamson, O. (1985) The Economic Institutions of Capitalism, New York Free Press, New York.
63. Yermack, D. (1996) Higher market valuation of companies with a small board of directors, Journal of Financial Economics, 40 (2 185 211.