Are CEOs in Family Firms Paid Like Bureaucrats?Evidence from Bayesian and Frequentist Analyses

The relationship between CEO pay and performance has been much analyzed in themanagement and economics literature. This study analyzes the structure of executivecompensation in family and non-family firms. In line with predictions of agency theory, it isfound that the share of base salary is higher with family-member CEOs than it is with nonfamilymember CEOs. Furthermore, family-member CEOs receive a lower share of optionpay. The paper’s findings have implications for family business research and the executivecompensation literature. To make the findings robust, the statistical analysis is performed withboth Bayesian and classical frequentist methods.