TY - JOUR
T1 - Differences in pay between owner and non-owner CEOs
T2 - Evidence from Israel
AU - Cohen, Shmuel
AU - Lauterbach, Beni
PY - 2008/2
Y1 - 2008/2
N2 - In a sample of 124 publicly traded Israeli firms in 1994-2001 we find that CEOs who belong to the family or business group that owns most of the firm shares ("owner CEOs") receive significantly (about 50%) higher pay than professional CEOs who do not belong to the control group ("non-owner CEOs"). Owner CEOs' pay performance sensitivity is also (insignificantly) lower than that of non-owner CEOs. These findings are most consistent with the view that owner CEOs exploit the firm and extract private benefits in the form of inflated pay. Among owner CEOs, we do not find any significant differences in pay between CEOs in family firms and CEOs in firms controlled by business partners.
AB - In a sample of 124 publicly traded Israeli firms in 1994-2001 we find that CEOs who belong to the family or business group that owns most of the firm shares ("owner CEOs") receive significantly (about 50%) higher pay than professional CEOs who do not belong to the control group ("non-owner CEOs"). Owner CEOs' pay performance sensitivity is also (insignificantly) lower than that of non-owner CEOs. These findings are most consistent with the view that owner CEOs exploit the firm and extract private benefits in the form of inflated pay. Among owner CEOs, we do not find any significant differences in pay between CEOs in family firms and CEOs in firms controlled by business partners.
KW - CEO compensation
KW - Owner CEO
KW - Ownership structure
UR - http://www.scopus.com/inward/record.url?scp=37449023916&partnerID=8YFLogxK
U2 - 10.1016/j.mulfin.2007.02.005
DO - 10.1016/j.mulfin.2007.02.005
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AN - SCOPUS:37449023916
SN - 1042-444X
VL - 18
SP - 4
EP - 15
JO - Journal of Multinational Financial Management
JF - Journal of Multinational Financial Management
IS - 1
ER -