Abstract
This paper examines the relation among firm performance, ownership structure, and board gender diversity on the firm board and CEO compensation, i.e., total compensation, salary-based compensation, and bonus-based compensation. The paper employs a unique dataset from S&P 1500 firms from 2007 to 2018. The empirical results suggest that large and diversified boards are the main determinants of CEO compensation, in line with the theory. Moreover, longer-tenured CEOs who also hold the board chairperson position receive greater compensation and bonuses than their peers. In addition, a firm financial performance affects CEO compensation, with the influence being more pronounced in the CEO's total compensation. This paper adds to the existing literature on CEO compensation, corporate governance, and board attributes, especially when revealing empirical support for the link between board diversity and CEO compensation against a strong demand for sound corporate governance practices.
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