The effect of the owner CEO on the relation between CEO compensation and firm performance: Korean case
In the study, we examine whether the owner CEO affects the relation between CEO compensation and firm performance. There is a positive relation between CEO compensation and firm performance in general. More in-depth analysis shows, however, that such positive relation diminishes in the owner CEO firms, specifically when the CEO is the largest owner. Firm performance also improves as the level of CEO ownership increases in the non-owner CEO firms; no significant results are found in the owner CEO firms. We conclude that the convergence-of-interests effect dominates in the non-owner CEO firms, the entrenchment effect dominates in the largest CEO firms, and both the convergence-of-interests and the conflict-of-interest effects exist together in the family CEO firms.
Global Business and Finance Review
CEO compensation, family CEO, firm performance, largest CEO, owner CEO, ownership
Kim, Yong Shik; Kang, Sun A.; and Seol, Inshik, "The effect of the owner CEO on the relation between CEO compensation and firm performance: Korean case" (2018). School of Management. 114.