Board compensation practices and agency costs of debt

Ertugrul, Mine; Hegde, Shantaram P.

doi:10.1016/j.jcorpfin.2008.09.004

Cited by 100 publications

(75 citation statements)

References 46 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Linn and Park 2005;Ertugrul and Hegde 2008;Farrell et al 2008). Yermack (2004) further extends this notion and presents additional evidence that the incentives non-executive directors face through compensation seem to matter more than those through reputation or retention decisions.…”

Section: Empirical Determinants Found In the Literaturementioning

confidence: 64%

“…While there are some authors that find evidence consistent with the above hypotheses (e.g. Hempel and Fay 1994;Ertugrul and Hegde 2008), others find evidence against them (e.g. Ryan and Wiggins 2004).…”

Section: Corporate Governance: Board Characteristicsmentioning

confidence: 97%

“…Ryan and Wiggins 2004;Ertugrul and Hegde 2008). It has been argued that larger boards are associated with less effective monitoring, since coordination and decision-making becomes less efficient and, consequently, the ability to exert pressure on the executive management diminishes (Jensen 1993;Eisenberg et al 1998).…”

Section: Corporate Governance: Board Characteristicsmentioning

confidence: 99%

“…In line with other studies, we use the return on assets (ROA) and, as an alternative proxy, the return on invested capital (ROIC) as measures for (operating) accounting-based performance (e.g. Ertugrul and Hegde 2008).…”

Section: Independent Variablesmentioning

confidence: 99%

“…In fact, empirical evidence from the US suggests that a growing number of companies are adopting compensation structures that aim to align interests of directors and shareholders, for instance by introducing equity-based incentives (e.g. Black and Bhagat 2002;Fich and Shivdasani 2005;Ertugrul and Hegde 2008).…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Determinants of director compensation in two-tier systems: evidence from German panel data

2010

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.

show abstract

Section: Empirical Determinants Found In the Literaturementioning

confidence: 64%

Section: Corporate Governance: Board Characteristicsmentioning

confidence: 97%

Section: Corporate Governance: Board Characteristicsmentioning

confidence: 99%

Section: Independent Variablesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Determinants of director compensation in two-tier systems: evidence from German panel data

2010

View full text Add to dashboard Cite

show abstract

Nonlinear impacts of board independence on debt financing: Contingent on the shareholdings of the largest shareholder

et al. 2020

View full text Add to dashboard Cite

Shareholder interest is unprotected until and unless precise financial decision making is in place. Although literature supports the independent directors' monitoring function in a decision‐making process, for a controversial debt financing issue, the influence of the largest shareholders may hinder such an action. This study aims to delineate the association between board independence and debt financing when the largest shareholders are likely to play a significant role between them. With a sample of Vietnamese listed companies from 2007 to 2016, our regression analyses show that a nonlinear U‐shaped relationship between level of board independence and debt financing is stronger among the largest shareholders with a high level of shareholdings in their shareholding group than the full sample. This finding implies the determining influence of the largest shareholders with a high level of shareholdings in a company. However, this association is not found in companies with a low level of shareholdings by the largest shareholders. Results reveal that the largest shareholders have the incentive to influence the decision making of independent directors about debt financing when their shareholdings are high. Specifically, issuing more debt to raise capital for business reduces the risk of the largest shareholders losing their controlling rights. The results are further supported by several robustness checks and controlling for economic events such as the global financial crisis and ASEAN Economic Community.

show abstract

Revisiting corporate governance and financial risk‐taking

Alzayed,

Eskandari,

Eshraghi

et al. 2023

Int. J Fin Econ

View full text Add to dashboard Cite

Corporate governance attributes have varying effects on risk taking when variables are examined separately. We study the effects of a large range of corporate governance attributes on risk taking using a comprehensive US sample. Our findings confirm that although there are certain characteristics that drive this positive effect such as compensation structure, there are those which have the opposite effect such as board‐level attributes. Our paper contributes to the broader literature on the relationship between corporate governance and risk in financial institutions, which are often overlooked in traditional studies. We shed light on the importance of studying corporate governance at a granular level rather than using a single index. The findings offer insights to regulators in determining suitable corporate governance frameworks to ensure the protection of investors rights in financial institutions.

show abstract

Board compensation practices and agency costs of debt

Cited by 100 publications

References 46 publications

Determinants of director compensation in two-tier systems: evidence from German panel data

Determinants of director compensation in two-tier systems: evidence from German panel data

Nonlinear impacts of board independence on debt financing: Contingent on the shareholdings of the largest shareholder

Revisiting corporate governance and financial risk‐taking

Contact Info

Product

Resources

About