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Lookup NU author(s): Dr Shams PathanORCiD
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0).
© The Author(s) 2021. We study the effects of family control on CEO pay from the perspective of behavioral agency model (BAM), with particular focus on family firm’s generational stage and CEO family ties. Using a panel of Australian listed firms, we find that family firms present lower total and variable CEO pay, showing also less pay disparity between the CEO and other top executives. We also find that multi-generational family firms and those run by non-family CEOs offer higher total and variable CEO pay and present high pay disparity. The BAM and family’s aversion to socioemotional wealth loss can explain the effects of family control based on the pursuing of non-financial family goals. The decline of these goals derived from the aging of the firm and the hiring of external CEOs shape family control and should be considered in the design of executive compensation policies and by external parties when assessing their suitability. JEL CLASSIFICATION: G30; G32; G34; G38
Author(s): Fernandez Mendez C, Arrondo Garcia R, Pathan S
Publication type: Article
Publication status: Published
Journal: BRQ Business Research Quarterly
Year: 2021
Pages: Epub ahead of print
Online publication date: 28/10/2021
Acceptance date: 02/04/2018
Date deposited: 20/12/2023
ISSN (print): 2340-9436
ISSN (electronic): 2340-9444
Publisher: SAGE Publications Inc.
URL: https://doi.org/10.1177/23409444211051754
DOI: 10.1177/23409444211051754
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