Please use this identifier to cite or link to this item:

Is it better to say goodbye? When former executives set executive pay

Andres, Christian
Fernau, Erik
Theissen, Erik
Year of Publication: 
Series/Report no.: 
CFR Working Paper 12-02
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.
executive compensation
board structure
two-tiered board
Document Type: 
Working Paper

Files in This Item:
There are no files associated with this item.
The document was removed on behalf of the author(s)/ the editor(s) on: August 27, 2013

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.