The cost of CEO duality: Evidence from French leadership compensation

Broye, Geraldine and François, Abel and Moulin, Yves,(2017), The cost of CEO duality: Evidence from French leadership compensation. , European Management Journal, UNSPECIFIED

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This paper aims to provide a detailed analysis of the relationship between board leadership structures and executive compensation. According to agency theory, the combined position of CEO and Chairperson of the Board (COB) entails greater compensation for the CEO in order to reduce conflicts of interest. In the literature, combined board structure is generally considered to generate additional costs for companies. However, the choice of two separate structures implies the payment of incentive compensation for the COB in addition to that defined for the CEO. This paper investigates the financial cost of duality when compensation packages are set for both leaders. Our results suggest that although combined board structure is associated with higher incentive compensation for the CEO, the overall compensation cost to the company is no higher when the chairperson's compensation is considered.
Keywords : Corporate governance, Executive compensation, Duality Chairperson of the board, France, UNSPECIFIED
Journal or Publication Title: European Management Journal
Item Type: Article
Subjects: Akuntansi
Depositing User: Gunawan Gunawan
Date Deposited: 26 Dec 2019 04:42
Last Modified: 26 Dec 2019 04:43

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