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CEO compensation and large shareholders: Evidence from emerging markets

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  • Gallego, Francisco
  • Larrain, Borja

Abstract

Using a novel data base for three emerging markets we study large shareholders and their relationship with professional managers. This is important to understand wage inequality and returns to high-level human capital since concentrated ownership is prevalent in developing countries. We find a compensation premium of about 30 log points for professional (not controller-related) CEOs working in firms controlled by a family compared to firms controlled by other large shareholders. The premium cannot be explained away by standard firm characteristics, observable executive skills (e.g., education or tenure), or the compensation of the CEO in her former job. The premium comes mostly from family firms with absent founders and when sons are involved.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 40 (2012)
Issue (Month): 4 ()
Pages: 621-642

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Handle: RePEc:eee:jcecon:v:40:y:2012:i:4:p:621-642

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Web page: http://www.elsevier.com/locate/inca/622864

Related research

Keywords: CEO compensation; Large shareholders; Family firms; Emerging markets;

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Cited by:
  1. Janto Haman & Hristos Doucouliagos & Michael Graham, 2012. "Agency Problem II and Convergence in CEO Pay," Economics Series 2012_5, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.

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