TY - JOUR
T1 - INVESTOR PROTECTION AND CEO COMPENSATION IN FAMILY FIRMS
AU - Bozzi, Stefano
AU - Barontini, Roberto
AU - Miroshnychenko, Ivan
PY - 2017
Y1 - 2017
N2 - This paper investigates the relationship between investor protection and CEO pay in familycontrolled
corporations. Using a panel of 986 firm-year observations from 11 EU countries, we
show that the lower the investor protection, the higher the compensation of the CEO. The
sensitivity of pay to the institutional context is higher for a family CEO than a professional CEO,
a result that corroborates the hypothesis that CEO compensation contracts in family firms are
influenced by familiar connections. Overall, these results are more consistent with the
hypothesis of rent extraction than with the perspective of optimal remuneration contracts.
AB - This paper investigates the relationship between investor protection and CEO pay in familycontrolled
corporations. Using a panel of 986 firm-year observations from 11 EU countries, we
show that the lower the investor protection, the higher the compensation of the CEO. The
sensitivity of pay to the institutional context is higher for a family CEO than a professional CEO,
a result that corroborates the hypothesis that CEO compensation contracts in family firms are
influenced by familiar connections. Overall, these results are more consistent with the
hypothesis of rent extraction than with the perspective of optimal remuneration contracts.
KW - Corporate Governance, Agency Theory, CEO Compensation, Family Firms, Investor Protection
KW - Corporate Governance, Agency Theory, CEO Compensation, Family Firms, Investor Protection
UR - http://hdl.handle.net/10807/108025
U2 - 10.22495/cocv14i2art2
DO - 10.22495/cocv14i2art2
M3 - Article
SN - 1727-9232
VL - 14
SP - 17
EP - 29
JO - CORPORATE OWNERSHIP & CONTROL
JF - CORPORATE OWNERSHIP & CONTROL
ER -