Board Structure and Executive Compensation in the Public Sector: New Zealand Evidence

29 Pages Posted: 5 Nov 2005

See all articles by Steven F. Cahan

Steven F. Cahan

University of Auckland Business School

Frances Chua

Massey University - School of Accountancy

Robert Nyamori

Massey University - School of Accountancy

Abstract

We provide evidence on the relation between board structure and CEO compensation in public sector corporations in New Zealand. Using a sample of 80 New Zealand public sector companies, we find that similar to private sector studies, CEO compensation is related to board size, whether the CEO sits on the board, and director quality. We also find that a composite measure of board structure is significant. We conclude that, similar to the private sector, board structure is important in constraining CEO pay. Moreover, our results suggest that private sector-style board can be effective in a public sector context.

Suggested Citation

Cahan, Steven F. and Chua, Frances and Nyamori, Robert, Board Structure and Executive Compensation in the Public Sector: New Zealand Evidence. Financial Accountability & Management, Vol. 21, No. 4, pp. 437-465, November 2005, Available at SSRN: https://ssrn.com/abstract=815186

Steven F. Cahan (Contact Author)

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

Frances Chua

Massey University - School of Accountancy ( email )

Palmerston North
New Zealand

Robert Nyamori

Massey University - School of Accountancy ( email )

Palmerston North
New Zealand

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