HCBE Faculty Articles
Title
Audit Committee Composition, Compensation Committee Composition, and Compensation Transparency
Document Type
Article
Publication Date
1-1-2011
Publication Title
Corporate Ownership and Control
ISSN or ISBN
1727-9232
Volume
9
Issue/Number
1
First Page
477
Last Page
487
Abstract/Excerpt
The increase in executive and director compensation in recent years has resulted in increased scrutiny of corporate compensation practices. Similarly, a recent survey indicates that 75 percent of directors and 75 percent of institutional investors believe that the manner in which executive pay is determined in the US is damaging to the image of corporate America (Perkins 2008). Investors, regulators, and other stakeholders have called on firms to provide greater transparency concerning these practices. My results from a sample of US firms indicate that compensation committee composition plays a greater role in the transparency of compensation practices than does audit committee composition. In addition, the independence of committee members is more important than their financial expertise. Investors, regulators, and other stakeholders outside of the US looking to increase the transparency of corporate compensation practices should look to increase the independence of compensation committees as one possible way to increase the transparency of corporate compensation practices.
DOI
10.22495/cocv9i1c4art5
NSUWorks Citation
Felo, Andrew J., "Audit Committee Composition, Compensation Committee Composition, and Compensation Transparency" (2011). HCBE Faculty Articles. 582.
https://nsuworks.nova.edu/hcbe_facarticles/582
