재무연구 제 권 호 (2015년 11월)
Asian Review of Financial Research, Vol., No..
pp.474~532
pp.474~532
Bankers on the board and CEO incentives
Min Jung Kang Assistant Professor of Finance, School of Management, University of Michigan-Flint, 2138 Riverfront Center, 303 E. Kearsley Street, Flint, MI 48502, USA
Y. Han (Andy) Kim Assistant Professor of Finance at SKKU (SungKyunKwan University)
Governance improvement measures, such as Sarbanes-Oxley Act (SOX), often stress the need for more financial experts on the boards. Directors who are from the borrowing bank need particular attention because the conflicts of interest between shareholders and debt holders would be most severe (Krozner and Strahan, 2001). In this paper, we examine whether commercial banker directors work for the best interest of shareholders in providing incentives to the CEO. When a commercial banker is on board, the equity compensation of the CEO decreases in the risk of the firm, especially when she is the member of compensation committee.
Min Jung Kang
Y. Han (Andy) Kim
Governance improvement measures, such as Sarbanes-Oxley Act (SOX), often stress the need for more financial experts on the boards. Directors who are from the borrowing bank need particular attention because the conflicts of interest between shareholders and debt holders would be most severe (Krozner and Strahan, 2001). In this paper, we examine whether commercial banker directors work for the best interest of shareholders in providing incentives to the CEO. When a commercial banker is on board, the equity compensation of the CEO decreases in the risk of the firm, especially when she is the member of compensation committee.
bankers on board,financial expertise,conflicts of interest,governance,board of directors,CEO compensation
