TITLE

DO SEASONED CEOS PREFER FEWER BOARD MEETINGS? EVIDENCE FROM PUBLICLY TRADED FIRMS

AUTHOR(S)
Aidong Hu; Richman, Vincent; Santos, Michael
PUB. DATE
March 2007
SOURCE
Review of Business Research;2007, Vol. 7 Issue 2, p29
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
We examine how firm characteristics and CEO compensation contract affect the frequency of annual board meetings. As predicted by corporate governance under managerial entrenchment hypothesis, the propensity to hold board meetings is significantly and positively associated with the size of the firm and is significantly and negatively associated with Return on Equity (ROE). Using data on 1,735 corporations during 1992-2000, we find evidence that seasoned CEOs with long tenure, high level of cash compensation are less likely to hold frequent board meetings. However, the existence of executive stock options and CEO long-term incentive plan may increase the frequency of board meetings. Our model performs well in predicting number of board meetings for firms using out-of-sample period of year 2001 and 2002. Our results extend and refine the growing literature on the relation of executive compensation, board activities and corporate governance.
ACCESSION #
31407995

 

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