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CEO compensation and performance in US private foundations
Author(s) -
Allen Arthur,
McAllister Brian
Publication year - 2018
Publication title -
financial accountability and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.661
H-Index - 44
eISSN - 1468-0408
pISSN - 0267-4424
DOI - 10.1111/faam.12150
Subject(s) - association (psychology) , compensation (psychology) , foundation (evidence) , accounting , sample (material) , pay for performance , executive compensation , performance measurement , business , economics , actuarial science , political science , management , psychology , microeconomics , law , incentive , social psychology , chemistry , chromatography , psychotherapist
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.