Family firms comprise more than one third of U.S. public firms. They differ significantly from widely-held firms in their promotion-based tournament environment and agency conflicts. These differences are likely to affect the design and efficacy of compensation incentives. However, most existing...

We use firms’ discretionary choices in the CEO pay ratio disclosure to examine corporate decisions under social pressure. Reported pay ratios are significantly lower when firms use complex methods to identify the median employee, whose total pay is the denominator in the ratio. Firms choose...

We use a hand-collected sample of 1,628 S&P 1500 firms and more than 12,000 executives to examine how family firms compensate nonfamily executives. Family firms comprise a large percentage of firms around the world, and most of their executives are not members of the founding family. Moreover,...

We examine how incentive compensation for nonfamily executives in family firms differs from incentive compensation for executives in nonfamily firms. Nonfamily executives in family firms receive significantly less performance-based pay and equity-based pay. Family monitoring, risk aversion, and...

Motivated by the dual agency environment in founding family firms, we examine how family firms provide compensation incentives to nonfamily executives. Nonfamily executives receive weaker risk-taking incentives and pay-for-performance incentives when family ownership is high and when family...