The composition of the compensation committee can impact CEO compensation practices. When insiders are part of the committee, CEOs tend to receive more favorable treatment, which can come at the expense of shareholders. However, having insiders on the committee does not necessarily mean that CEOs receive higher compensation compared to firms without insiders. The relationship between CEO compensation and performance is skewed in favor of the CEO in firms with insiders on the compensation committee, ultimately benefiting the CEO at the expense of shareholders.