Boards of directors' self interest: Expanding for pay in corporate acquisitions? Academic Article

abstract

• Director compensation can potentially represent an ethical minefield. When faced with supporting strategic decisions that can lead to an increase in director pay, directors may consider their own interests and not solely those of the shareholders to whom they are legally bound to represent. In such cases, directors essentially become agents, rather than those installed to protect principals (shareholders) from agents. Using acquisitions as a study context, we employ a matched-pair design and find a statistically significant difference in outside director compensation between acquiring and control firms. Outside directors of acquiring firms earn more than twice as much as their counterparts in the matched-sample. 2007 Springer Science+Business Media B.V.

authors

• Lester, Richard

published proceedings

• JOURNAL OF BUSINESS ETHICS

author list (cited authors)

• Certo, S. T., Dalton, C. M., Dalton, D. R., & Lester, R. H.

citation count

• 31

complete list of authors

• Certo, S Trevis||Dalton, Catherine M||Dalton, Dan R||Lester, Richard H

publication date

• January 2008

publisher

• Springer Nature  Publisher

published in

• Journal of Business Ethics  Journal

keywords

• Acquisitions
• Agency Theory
• Board Of Directors
• Director Compensation

Digital Object Identifier (DOI)

• 10.1007/s10551-006-9345-5

start page

• 219

end page

• 230

volume

• 77

issue

• 2

URL

• http%3A%2F%2Fdx.doi.org%2F10.1007%2Fs10551-006-9345-5