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Do directors perform for pay?

By Renee B. Adams and Daniel Ferreira

Abstract

Many corporations reward their outside directors with a modest fee for each board meeting they attend. Using a large panel data set on director attendance behavior in publicly-listed firms for the period 1996–2003, we provide robust evidence that directors are less likely to have attendance problems at board meetings when board meeting fees are higher. This is surprising since meeting fees, on average roughly $1,000, represent an arguably small fraction of the total wealth of a representative director in our sample. Thus, corporate directors appear to perform for even very small financial rewards

Topics: HB Economic Theory, HG Finance
Publisher: Elsevier
Year: 2008
DOI identifier: 10.1016/j.jacceco.2008.06.002
OAI identifier: oai:eprints.lse.ac.uk:39400
Provided by: LSE Research Online
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