Strategic Management Journal (1994)

Author: Boyd, B.K.

Date: 1994

Title: Board control and CEO compensation

Abstract: The board of directors has been identified as a key internal control mechanism for setting CEO compensation.  Theory suggests that CEOs will attempt to circumvent board control in an effort to maximize salary.  This hypothesis was tested using a sample of 193 firms in a cross-section of industries.  Corporate governance literature was reviewed to develop a multiple indicator model of board control.  Although, as hypothesized, CEO salaries were greater in firms with lower levels of control, CEO compensation was not significantly related to firm size or performance.


boards of directors

executive compensation

agency theory

strategy implementation

structural models