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Family control and executive compensation
Jönköping University, Jönköping International Business School, JIBS, Economics.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This paper examines the effect of family ownership and control on executive compensation in listed firms during the period 2003-2008. The descriptive statistics show that CEOs in non-family-controlled firms have a significantly higher share of variable compensation than CEOs in family-controlled firms, they also receive remuneration in stock options relatively more often. The econometric analysis shows that family control and ownership concentration reduce CEO compensation whereas multiple-class shares increase the level of compensation. In line with the findings of previous research, firm size and performance are positively related to CEO compensation.

Keyword [en]
Corporate governance, executive compensation, and family ownership
National Category
URN: urn:nbn:se:hj:diva-31945OAI: diva2:1033525
Available from: 2016-10-07 Created: 2016-10-07 Last updated: 2016-10-07Bibliographically approved
In thesis
1. Family Ownership and Investment Performance
Open this publication in new window or tab >>Family Ownership and Investment Performance
2010 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation provides an economic analysis of families as owners of large listed firms. The essential research question is whether family ownership provides an efficient form of governance. Family ownership and control is evaluated from different angles; how ownership, control, management, and board structure affects firm performance, and executive compensation.

Chapter two “A Contractual Perspective of the Firm with an Application to the Maritime Industry” is a conceptual paper analyzing the contractual structure of a firm. The chapter conceptualizes the relations between firms, and markets, and gives a transaction cost perspective of why firms are organized the way they are.

The third chapter “The Impact of Vote Differentiation on Investment Performance in Listed Family Firms” investigates ownership and control in Swedish family controlled firms. The analysis shows that family control is beneficial, but only if voting rights and cash-flow rights are aligned.

The fourth chapter “Family Control and Executive Compensation” analyses whether families use remuneration as a way to expropriate minority shareholders. The study shows that managers in family-controlled firms have alower share of variable compensation than managers in non-family controlled firms. The analysis shows further that family control has a reducing effect on the total level of CEO-compensation.

The last chapter “Board of Directors, Dependency, and Returns on Investment” investigates if there is a relationship between ownership structure, board of directors, and firm performance. The marginal q analysis indicate that firm dependent directors have a negative impact on firms’ investment performance. Owner-dependent and employee elected directors do not affect firm investment performance.

To sum up, the empirical results show that family ownership and control affects remuneration in listed firms, and the firm investment performance. The analysis further shows that there are clear differences in the ownership and governance structure between family and non-family controlled firms.

Place, publisher, year, edition, pages
Jönköping: 2010, 2010. 38 p.
JIBS Dissertation Series, ISSN 1403-0470 ; 066
National Category
urn:nbn:se:hj:diva-14518 (URN)9789186345143 (ISBN)
Public defence
2010-10-22, B1033, Gjuterigatan 5, Jönköping, 16:53 (English)
Available from: 2011-02-10 Created: 2011-02-01 Last updated: 2016-10-07Bibliographically approved

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