Research review on director pay

Abstract

Members of the board of directors are charged with setting executive pay, and the way they compensate themselves may provide valuable information for understanding executive compensation (Yermack, 2004; Ryan and Wiggins, 2004) and other firm outcomes. Research on director pay is still in its infancy. Compared to the vast amount of research conducted on executive pay, academics have long shown relatively little interest in understanding how non-executive board members are getting paid and what effects their compensation has on the firm.