题 目：The Effect of Within-Outside-Director Connectedness on Their Monitoring Role: Evidence from CEO Compensation
报 告 人：申屠李融 助理教授
主 持 人：张 国 清 教授
论文摘要：I investigate the effect of within-outside-director connectedness (i.e., the extent to which outside directors on a same board are mutually connected) on CEO compensation. Identifying the mutual connection between outside directors based on their prior shared experience in employment, education and social activities, I measure within-outside-director connectedness by the percentage of connected pairs among all possible outside director pairs. Based on a large sample of US listed companies from 2003 to 2017, I document that within-outside-director connectedness is negatively associated with CEO compensation level, suggesting that the mutual connections within outside directors improve their monitoring role by constraining excess pay to CEO. Moreover, equity-form compensation, is mainly affected. Meanwhile, the analysis of connection types implies education-based and social activities-based connections consistently reduce CEO pay, while effect of employment-based connection depends on the role of connected directors during the co-working experience. Additionally, it’s the mutual connection with compensation committee member involved (i.e., at least one in the connected pair is a compensation committee member) that mainly drives this compensation constraint effect. I also find that the clarity of hierarchy within connected outside directors, the connection between CEO and mutually-connected outside directors, firm corporate governance strength and CEO entrenchment power potentially alter the constraint effect.