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Family CEOs vs nonfamily CEOs in the family-controlled firm an examination of the level and sensitivity of pay to perfor

By: McConaughy, Daniel L

Material type: Article

ArticlePublisher: 2000Description: 121 - 131 In: Family Business ReviewSummary: This study examines CEO compensation in 82 founding-family-controlled firms; 47 CEOs are members of the founding family and 35 are not. It tests the family incentive alignment hypothesis, which predicts that family CEOs have superior incentives for maximizing firm value and, therefore, need fewer compensation-based incentives. Univariate and multivariate analyses show that family CEOs' compensation levels are lower and that they receive less incentive-based pay - confirming the family incentive alignment hypothesis and suggesting the possible need for family firms to increase CEO compensation when they replace a founding family CEO with a nonfamily-member CEO.

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Item type	Current location	Call number	Vol info	Status	Date due	Barcode
Articles	Ahmedabad (HO)	(Browse shelf)	Vol. 13, Issue. 2	Available		020097

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This study examines CEO compensation in 82 founding-family-controlled firms; 47 CEOs are members of the founding family and 35 are not. It tests the family incentive alignment hypothesis, which predicts that family CEOs have superior incentives for maximizing firm value and, therefore, need fewer compensation-based incentives. Univariate and multivariate analyses show that family CEOs' compensation levels are lower and that they receive less incentive-based pay - confirming the family incentive alignment hypothesis and suggesting the possible need for family firms to increase CEO compensation when they replace a founding family CEO with a nonfamily-member CEO.

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