Not clawing the hand that feeds you: The case of co-opted boards and clawbacks

Author

Sterling HUANG, Singapore Management UniversityFollow
Chee Yeow LIM, Singapore Management UniversityFollow
Jeffrey NG, Singapore Management UniversityFollow

Publication Type

Journal Article

Version

publishedVersion

Publication Date

1-2019

Abstract

We examine how board co-option, defined as the fraction of the board comprising directors appointed after the CEO assumed office, is related to clawback adoption. We find that co-opted boards have a lower probability of adopting clawback provisions. Further, the negative association between board co-option and clawback adoption is more pronounced when at least one co-opted member is on the compensation committee and when there is a higher likelihood that a clawback provision will be triggered. Finally, we find that board co-option is an important mechanism through which longer-tenured CEOs reduce the likelihood of clawback adoption.

Keywords

Clawbacks, Co-opted boards, Corporate governance

Discipline

Accounting | Corporate Finance

Research Areas

Corporate Reporting and Disclosure

Publication

European Accounting Review

Volume

28

Issue

1

First Page

101

Last Page

127

ISSN

0963-8180

Identifier

10.1080/09638180.2018.1446036

Publisher

Taylor and Francis

Citation

HUANG, Sterling; LIM, Chee Yeow; and NG, Jeffrey. Not clawing the hand that feeds you: The case of co-opted boards and clawbacks. (2019). European Accounting Review. 28, (1), 101-127.
Available at: https://ink.library.smu.edu.sg/soa_research/1423

Copyright Owner and License

Authors

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Additional URL

https://doi.org/10.1080/09638180.2018.1446036