Title

Family ownership, corporate governance, and top executive compensation

Document Type

Journal article

Source Publication

Managerial and Decision Economics

Publication Date

1-1-2006

Volume

27

Issue

7

First Page

549

Last Page

561

Publisher

John Wiley & Sons, Ltd.

Abstract

In this study we investigate how top management pay is determined in a family firm environment where even listed firms are effectively controlled by a single individual or a single family. Using data from Hong Kong, we find that executive directors' pay is reduced if the directors have substantial stockholdings. Moreover, pay is related to profits but not to stock returns. Our results are consistent with external blockholders and independent non-executive directors persuading firms to base top management compensation on a firm's profitability.

DOI

10.1002/mde.1273

Print ISSN

01436570

E-ISSN

10991468

Publisher Statement

Copyright © 2013 Inderscinece Enterprises Ltd.

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Recommended Citation

Cheng, S., & Firth, M. (2006). Family ownership, corporate governance, and top executive compensation. Managerial and Decision Economics, 27(7), 549–561. doi: 10.1002/mde.1273