CEO Compensation Among Firms Controlled by Large Shareholders: Evidence from Emerging Markets | Zendy

Francisco Gallego | Zendy; Borja Larraín | Zendy

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CEO Compensation Among Firms Controlled by Large Shareholders: Evidence from Emerging Markets

Author(s) -

Francisco Gallego,

Borja Larraín

Publication year - 2010

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.1718704

Subject(s) - shareholder , business , executive compensation , emerging markets , compensation (psychology) , monetary economics , accounting , corporate governance , financial system , economics , finance , psychology , psychoanalysis

Using a novel data base for three emerging markets, we find that the type of large shareholder matters for CEO compensation. In particular, we find a compensation premium of about 30 log points for professional (not controller-related) CEOs working in firms controlled by a family compared to firms controlled by other large shareholders. The premium cannot be explained away by standard firm characteristics, observable executive skills (e.g., education or tenure), or the compensation of the CEO in her former job. The premium comes mostly from family firms with absent founders and when sons are involved.

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