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

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.