“…Finally, the optimal contracting lens considers only two parties who participate in the compensation setting process: executives and the BoD. However, several other parties can influence the performance sensitivity of executive pay, including employees (Cowherd & Levine, 1992), blockholders (Hambrick & Finkelstein, 1995), and creditors (Mintz, 2005). In contexts other than the US, which are often typified by well-organized labor, controlling owners, and debt financing, a stronger focal relationship may still result in spite of a weak BoD.…”