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논문검색

Bankers on the board and CEO incentives

초록

영어

Governance improvement measures, such as Sarbanes-Oxley Act (SOX), often stress the need for more financial experts on the boards. Directors who are from the borrowing bank need particular attention because the conflicts of interest between shareholders and debt holders would be most severe (Krozner and Strahan, 2001). In this paper, we examine whether commercial banker directors work for the best interest of shareholders in providing incentives to the CEO. When a commercial banker is on board, the equity compensation of the CEO decreases in the risk of the firm, especially when she is the member of compensation committee.

목차

Abstract
 1. Introduction
 2. Literature Review
 3. Data and methodology
  3.1 The sample
  3.2 Sample distribution and summary statistics
 4. Empirical method and results
  4.1 Compensation regressions
  4.3. Debt‐like compensation and CBDs
  4.4 Stock market event study of CBD appointments
  4.5. Change of VEGA and Leverage before and after CBD appointment/departure
  4.6. Endogeneity concern and selection
  4.7. Compensation committee membership of CBD
 5. Summary and Conclusion
 References
 Appendix A. Variable Definition
 Appendix B. Link between BoardEx and Compustat databases and identifying executives
 Appendix C. CEO turnover regressions
 Appendix D. Classifying forced versus voluntary CEO turnover following Parrino(1997)
 Appendix E. Compensation committee membership/chairmanship of ABD, NABD,and CEO compensation

저자정보

  • Min Jung Kang Assistant Professor of Finance, School of Management, University of Michigan-Flint, 2138 Riverfront Center, 303 E. Kearsley Street, Flint, MI 48502, USA
  • Y. Han (Andy) Kim Assistant Professor of Finance at SKKU (SungKyunKwan University)

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