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Are company founders underpaid?

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This article examines the relation between founder status and CEO compensation in publicly listed US firms. The results suggest that CEO/founders receive lower cash pay and total compensation compared to professional managers. In contrast, CEOs who are relatives of the founders receive similar cash pay and total compensation to that of professional managers. Different compensation levels also emerge in terms of stock option awards. The findings underline the importance of distinguishing among these three CEO types when examining the determinants of executive compensation.

Keywords: G30; J33; M52; executive compensation; founders; repricing; stock options

Document Type: Research Article


Affiliations: Compliance Risk Analysis Division, Office of the Comptroller of the Currency, Washington, DC 20219, USA

Publication date: June 1, 2013

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