Business, Management and Accounting
5 years ago

Corporate governance fails to curb excessive director compensation, perpetuating social inequality.

Journal of Business Economics and Management
DIRECTORS’ COMPENSATION. WHAT REALLY MATTERS?
Isabel Acero Fraile, Nuria Alcalde Fradejas

Paper Summary

Directors' compensation in large companies is a hot topic due to growing social inequality. A study in Spain looked at how firm-level and director-level factors affect directors' pay. The results show that directors' pay is influenced by their unique skills rather than corporate governance mechanisms. Non-executive directors' pay is based on company characteristics, while executive directors' pay is more individualized. Overall, corporate performance does not seem to impact directors' compensation.

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