Wharton-SMU Research Center

In-House Seminar

Guest Speaker:

Irem Tuna
Assistant Professor of Accounting, The Wharton School, University of Pennsylvania.

Date & Venue:
Date: 31 May 2005, Tuesday
Time: 4.00pm-5.45pm
Venue: Accountancy Building, Level 6, Seminar Room 4,
Singapore Management University
469 Bukit Timah Road, Singapore 259756
(Location Map)

Topic:
Back Door Links Between Directors and Executive Compensation

About the Seminar:
This paper examines whether links between inside and outside directors have an impact on CEO compensation. Using a comprehensive sample of 22,074 directors for 3,114 firms, we develop a measure of the "back door" distance between each pair of directors on a company's board. Specifically, using the entire network of directors and firms, we compute the minimum number of other company boards that are required to establish a connection between each pair of directors (ignoring the obvious link that occurs when directors are on the same board). The back door distance provides a measure for the existence and strength of a communication channel between board members that can be used to influence decisions by the board of directors. We document that CEOs at firms where there is a relatively short back door distance between inside and outside directors or between the CEO and the members of the compensation committee earn substantially higher levels of total compensation (after controlling for standard economic determinants and other personal characteristics of the CEO and the structure for board of directors). This statistical association is consistent with recent claims that the monitoring ability of the board is hampered by "cozy" and possibly difficult to observe relationships between directors.

Registration:
This seminar is free. Please register early. (Admission on a first-come-first-served basis.)
For registration, please click here

Enquiries:
Ms. Lim Lih Yeng
Email: lylim@smu.edu.sg, Tel: 6822-0197
Ms. Priscilla Cheng
Email: priscillacheng@smu.edu.sg, Tel: 6822-0383