Boards with more outside members more likely to use non-financial measures
The type of people on a company's board of directors affects whether they use non-financial measures in CEO pay. Boards with more outside members are more likely to use these measures. Boards with a mix of inside and outside members are also likely to use non-financial measures. But if inside directors own a lot of company stock, they are less likely to use these measures. This shows that when board members have a lot of company stock, they might make decisions that benefit themselves instead of the company.