CEO compensation and performance in US private foundations. (8th February 2018)

• Record Type: Journal Article
• Authors: Allen, Arthur; McAllister, Brian
• Is Part Of: Financial accountability & management. Volume 34:Number 2(2018:May)
• Page Start: 117
• Page End: 132
• Publication Date: 2018-02-08
• Subjects: compensation -- efficiency -- nonprofit -- performance -- private foundation; Finance, Public -- Accounting -- Periodicals; Accounting -- Periodicals; Managerial accounting -- Periodicals; Public administration -- Periodicals; 658.159
• DOI: 10.1111/faam.12150
• Languages: English
• ISSNs: 0267-4424

Abstract

Abstract: In a large sample of US private foundations, we examine the association between CEO compensation and an accounting‐based measure of performance, administrative efficiency. We document a positive pay–performance association across time within foundations, but a negative association across foundations. We interpret our evidence as follows: some foundation boards reward CEOs for high administrative efficiency, which results in a positive pay–performance association. However, some foundations are poorly monitored relative than others, resulting in higher CEO compensation and lower efficiency.