Compensation committee composition as a determinant of CEO compensation

Extant research examining the relationship between a firm's board and its CEO's compensation has focused primarily on the composition of the board-at-large. However, it may be the nature of the compensation committee, not the board as a whole, that is at issue. This study was a longitudinal assessment of the relationship between the composition of a firm's compensation committee and multiple measurements of CEO compensation. We found no evidence that "captured" directors led to greater levels of, or changes in, CEO compensation. These findings may suggest the consideration of theories other than agency theory as explanations for the continued focus on board independence.