How Does Board Structure Influence CEO Compensation? - Evidence from Sweden
CEO CompensationBoard StructureCorporate GovernanceCross-sectional RegressionSwedish Code of Corporate GovernanceManagement of enterprisesFöretagsledningManagementBusiness and Economics
The purpose of the study is to investigate how board structure influences CEO compensation for companies listed on the Stockholm Stock Exchange in 2004. The theoretical frame of reference is based upon the corporate governance theory, the principal-agent theory and previous empirical research in the area. A cross sectional regression analysis is used, where a number of control variables are included and significance tests are conducted. The study is based on information regarding CEO compensation, and possible factors affecting the compensation, from 267 companies listed on the Stockholm Stock Exchange A- and O-list in the year 2004. We find that the board structure has no significant effect on the CEO compensation. Instead, the firm size, as measured by the firm?s total assets, number of employees and whether any CEO stock options exist are strongly significant determinants for CEO compensation.