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Boards, Executive Excess Compensation, and Shared Power: Evidence from Nonprofit Firms
Journal article

Boards, Executive Excess Compensation, and Shared Power: Evidence from Nonprofit Firms

Jacqueline Garner and Teresa Harrison
The Financial review (Buffalo, N.Y.), v 48(4), pp 617-643
01 Nov 2013

Abstract

Business & Economics Business, Finance Social Sciences
We investigate how executives, the board, and excess compensation jointly affect the performance of nonprofits. Since the common measure of nonprofit performance often includes salaries, we also use expenses that directly benefit the targeted population. Our results suggest that above average compensation for executives is associated with poor firm performance. However, the negative relation of CEO pay to performance occurs for firms with only one executive, the CEO. We conclude that a powerful CEO with autonomy can harm firm performance, but other executives can mitigate these agency problems. The board also appears to monitor direct community benefits more than indirect benefits.

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Collaboration types
Domestic collaboration
Web of Science research areas
Business, Finance
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