Foreign experience and CEO compensation

Martin J. Conyon; Lars Helge Hass; Skrålan Vergauwe; Zhifang Zhang

doi:10.1016/j.jcorpfin.2017.12.016

Foreign experience and CEO compensation

Martin J. Conyon, Lars Helge Hass, Skrålan Vergauwe, Zhifang Zhang

Accounting And Finance

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83 Citations (Scopus)

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Abstract

This paper investigates the relationship between a CEO's foreign experience and CEO compensation. Our analysis is based on the constituent firms of the UK FTSE 350 index from 1999 to 2015. We find that foreign CEOs and national CEOs with foreign working experience receive significantly higher levels of total compensation compared to similar UK CEOs without such characteristics. The results are robust to the endogenous CEO selection using propensity score matching methods, as well as other modelling approaches. Our results show that pay premiums are attributable to the specialized foreign expertise and foreign networks of CEOs, which stem from foreign experience rather than broader general managerial skills.

Original language	English
Pages (from-to)	102-121
Number of pages	20
Journal	Journal of Corporate Finance
Volume	57
Early online date	6 Jan 2018
DOIs	https://doi.org/10.1016/j.jcorpfin.2017.12.016
Publication status	Published - 31 Aug 2019

Keywords

foreign experience
corporate governance
executive compensation
international business

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10.1016/j.jcorpfin.2017.12.016

Conyon-etal-JCF-2018-Foreign-experience-and-CEOAccepted author manuscript, 795 KBLicence: CC BY-NC-ND 4.0

http://repository.essex.ac.uk/21027/

Lars Helge Hass
- lars.hassstrath.acuk
- Accounting And Finance - Professor
Person: Academic

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title = "Foreign experience and CEO compensation",

abstract = "This paper investigates the relationship between a CEO's foreign experience and CEO compensation. Our analysis is based on the constituent firms of the UK FTSE 350 index from 1999 to 2015. We find that foreign CEOs and national CEOs with foreign working experience receive significantly higher levels of total compensation compared to similar UK CEOs without such characteristics. The results are robust to the endogenous CEO selection using propensity score matching methods, as well as other modelling approaches. Our results show that pay premiums are attributable to the specialized foreign expertise and foreign networks of CEOs, which stem from foreign experience rather than broader general managerial skills.",

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AU - Hass, Lars Helge

AU - Vergauwe, Skrålan

AU - Zhang, Zhifang

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AB - This paper investigates the relationship between a CEO's foreign experience and CEO compensation. Our analysis is based on the constituent firms of the UK FTSE 350 index from 1999 to 2015. We find that foreign CEOs and national CEOs with foreign working experience receive significantly higher levels of total compensation compared to similar UK CEOs without such characteristics. The results are robust to the endogenous CEO selection using propensity score matching methods, as well as other modelling approaches. Our results show that pay premiums are attributable to the specialized foreign expertise and foreign networks of CEOs, which stem from foreign experience rather than broader general managerial skills.

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KW - executive compensation

KW - international business

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JO - Journal of Corporate Finance

JF - Journal of Corporate Finance

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Foreign experience and CEO compensation

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Keywords

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Lars Helge Hass

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