Veliyath, Rajaram <br/><br/>
Social embeddedness, overt and covert power, and their effec pay 
an empirical examination among family businesses in India 
 -  2000 
 - 293 - 311 
<br/><br/> The literature on CEO compensation reflects two common biases: (a) the dominant use of the agency theory perspective and (b)  the almost exclusive use of U.S. and U.K samples. Agency theory views compensation as a consequence of the incentive contracts and the processes of corporate governance. However, little is known about the determinants of CEO compensation in developing countries. Considering that foreign direct investment of U.S. multinational enterprises increased 10-fold over the past decade, mostly in developing economies, there is a great need to understand the dynamics of pay setting in these foreign contexts. Overall, there is an imperative need to explore alternative theoretical perspectives as well as investigate nontraditional contexts to  broaden existing theoretical premises. In an attempt to address this need, this study investigates the CEO's social embeddedness and overt and covert power as determinants of CEO pay in a sample of Indian family-controlled firms. Using a time-series, cross-sectional regression analysis, we find family shareholding and the percentage of inside directors on the board (identified as bases of overt power for the CEO) to be the...