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http://hdl.handle.net/10419/59510
  
Title:Is it better to say goodbye? When former executives set executive pay
Authors:Andres, Christian
Fernau, Erik
Theissen, Erik
Issue Date:2012
Series/Report no.:CFR Working Paper 12-02
Abstract:In the German two-tiered system of corporate governance, it is common practice for chief executive officers (CEOs) to become the chairman of the supervisory board of the same company upon retirement. As members of the supervisory board, they are involved in setting the pay for their successors as well as for their former colleagues. We analyze a panel covering 150 listed firms and the period 1998-2007. We show that firms in which a former CEO serves as the chairman of the board of directors pay their executives significantly more. We find no difference in the compensation for the members of the supervisory board. Thus, former CEOs apparently exert their influence to increase the pay of their former colleagues and their successor, but not their own pay.
Subjects:executive compensation
board structure
two-tiered board
JEL:G30
G38
Document Type:Working Paper
Appears in Collections:CFR Working Papers, Centre for Financial Research (CFR), Universität Köln

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