The cost of CEO duality: Evidence from French leadership compensation

Broye, Géraldine; Audigier, François; Moulin, Yves

doi:10.1016/j.emj.2017.01.007

Cited by 27 publications

(23 citation statements)

References 64 publications

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“…However, dual structure that separates these two functions characterizes the Anglo‐American setting where approximately 87% of boards are dually structured. Broye, François, and Moulin () provide a detailed analysis of the relationship between board leadership structures and executive compensation. For him, the combined position of CEO and Chairperson of the Board entails greater compensation for the CEO in order to reduce conflicts of interest.…”

Section: Data Analyses and Empirical Resultsmentioning

confidence: 99%

How does CEO pay slice influence corporate social responsibility? U.S.–Canadian versus Spanish–French listed firms

Jouber

2019

Corp Soc Responsibility Env

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Considering specific contextual differences (in laws, governance attributes, and CEO pay policies) found between the Anglo-American and the European corporate governance models and controlling for institutional attributes, ownership structures, and firm's features characterizing the two settings, we aim to explore if there is a link between CEO pay slice (CPS) and corporate social responsibility (CSR). We follow Bebchuk et al. (2011) to measure CPS. We consider sustainability indicators as proxy to capture CSR. Sustainability indicators are gathered from Global Reporting Initiative of sustainability standards (GRI's) report. Data cover the period 2010-2017 and consist of 1,440 U.S.-Canadian and Spanish-French firm-year observations. American and Canadian (Spanish and French) firms are considered as to refer to the Anglo-American (European) corporate governance model. Durbin-Wu-Hausman test is ruled to address endogeneity problem of dual variables and supports consistent null hypotheses of fixed effects model. Underthe agency theory's "bright side" paradigm, univariate and multivariate cross-country analysis supports that CPS is positively associated with firm's initiatives to engage in CSR and that sustainability is more pronounced under stronger investor protection, strict law enforcement, and higher corporate governance quality. Robustness checks reveal that (a) the deferred CPS-CSR causal effect seems higher for option-based compensation than that for stock-based compensation and (b) within the options (stocks) rewards, unvested options (restricted stocks) are the most effective to enhance firm's CSR practices.

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Section: Data Analyses and Empirical Resultsmentioning

confidence: 99%

How does CEO pay slice influence corporate social responsibility? U.S.–Canadian versus Spanish–French listed firms

Jouber

2019

Corp Soc Responsibility Env

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“…Scholars have suggested that stakeholders might perceive more monitoring and less expropriating when a smaller gap exists between the largest and second‐largest blockholders (Delgado‐García et al, 2010). Regarding the additional costs related to CEO duality, such as increased costs for CEO and board chair compensation, Broye et al (2017) suggested that the board plays a vital role in protecting the interests of minority shareholders and saves them from expropriation resulting from excessive CEO compensation.…”

Section: Review Of the Literaturementioning

confidence: 99%

“…Given their higher level of bargaining power over other board members, these chairs face fewer constraints and monitoring by board members (Arthur, 2001). Research suggests that they can hold multiple directorships, increase CEO compensation, organize off‐site meetings, restrict mandatory disclosures, and utilize power to restrain boards from demanding increased attention to monitoring or adopting higher audit quality (Bassett, Koh, & Tutticci, 2007; Bliss, 2011; Broye, François, & Moulin, 2017; Chen, Liu, & Li, 2010; Martin, Wiseman, & Gomez‐Mejia, 2019; O'Sullivan, 2005; Tuggle, Sirmon, Reutzel, & Bierman, 2010). To justify high CEO compensation, one study found that they can select highly paid peers to the organization (Faulkender & Yang, 2010).…”

Section: Review Of the Literaturementioning

confidence: 99%

The role of the board chair—A literature review and suggestions for future research

Banerjee

Nordqvist

Hellerstedt

2020

Corporate Governance

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Research Question/Issue: The role of the board chair has become increasingly complex in recent decades. Research on corporate governance has called for and has initiated the pursuit of more research for the purpose of creating a better understanding of the role of board chairs. We reviewed 234 academic articles published in 66 journals, structured the existing research according to an Input-Process-Outcome-Contexts framework, and provided a future research agenda for studies on the role of the board chair. Research Findings/Insights: Our review reveals that the number of published studies on the position of the board chair has grown over the last two decades. Although extant research is dominated by quantitative studies exploring the impact of the board chair position on financial performance, frequently drawing on agency and stewardship theory, recent work has moved beyond this focus and has added valuable insights. The Input-Process-Outcome-Contexts framework used to structure the extant research reveals that future research should pursue topics related to all components of the framework and that opportunities exist to draw from a broader set of theories. Theoretical/Academic Implications: Based on the framework, we formulate seven specific research topics that can add valuable insights into the role of the board chair and suggest theories that can help inform research pursuing these topics. Taken together, these topics have the potential to create valuable insights into how board chairs are appointed, develop competencies, and interact and work with the CEO, the top management team, the board, and other stakeholders while acknowledging the influence of contextual factors, such as ownership, diversity, the firm's development stage, and external events and trends. Practitioner/Policy Implications: Our review shows a growing global movement toward prescribing more corporate governance regulations and separating the positions of the board chair and the CEO. We show that many aspects need to be considered when choosing a governance configuration and when appointing a board chair because this role is becoming increasingly demanding.

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“…They have found a U‐shaped relationship between state ownership and CEO compensation. Differently, Broye, Abel, and Moulin (2017) have analyzed the relationship between board structure and CEO compensation, based on a sample of 113 French firms, during 2005–2011, and they have found that combined board structure is associated with higher incentive compensation for the CEO. Also, Dardour, Husser, and Hollandts (2015) have used a sample of companies listed on the SBF 120 index during the period from 2003 to 2013, to examine the effect of board diversity component on CEO compensation.…”

Section: Introductionmentioning

confidence: 99%

Does CEO compensation matter in boosting firm performance? Evidence from listed French firms

Zoghlami

2020

Manage Decis Econ

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The paper investigates the impact of chief executive officer (CEO) compensation on firm performance from a sample of 155 listed French companies on SBF 120, over 2009-2018. Findings suggest that an increase in CEO compensation seems to improve the accounting-based firm performance, nevertheless it hurts the firm stock market value. More pronounced results are reported when we control for sector compensation interactions. We argue that attractive compensation may improve the executive services in achieving shareholders' objectives, but investors seem to not appreciate a CEO compensation increase. Based on the agency theory, it might be argued that investors fear possible executive opportunistic behavior encouraging them to enjoy overcompensation.

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The cost of CEO duality: Evidence from French leadership compensation

Cited by 27 publications

References 64 publications

How does CEO pay slice influence corporate social responsibility? U.S.–Canadian versus Spanish–French listed firms

How does CEO pay slice influence corporate social responsibility? U.S.–Canadian versus Spanish–French listed firms

The role of the board chair—A literature review and suggestions for future research

Does CEO compensation matter in boosting firm performance? Evidence from listed French firms

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