Determinants of the levels and changes in non‐executive director compensation. (24th September 2014)

• Record Type: Journal Article
• Authors: Bugeja, Martin; Fohn, Stephanie; Matolcsy, Zoltan
• Editors: Fargher, Neil
• Is Part Of: Accounting and finance. Volume 56:Number 3(2016:Sep.)
• Page Start: 627
• Page End: 667
• Publication Date: 2014-09-24
• Subjects: Director compensation -- Non‐executive directors -- Compensation policy; Accounting -- Periodicals; Finance -- Periodicals; 657.05
• DOI: 10.1111/acfi.12093
• Languages: English
• ISSNs: 0810-5391

Abstract

Abstract: This study examines the economic and director‐specific determinants of non‐executive director (NED) compensation in the Australian setting. We find that NED compensation is associated with firm size, complexity, growth, risk and liquidity. It is also associated with director reputation, experience, connectedness and the directors' involvement with the firm. The additional compensation paid to the chairperson is positively associated with their prior experience and negatively associated with NED reputation and involvement. We find inconclusive evidence on the association between changes in NED compensation and firm performance.