Determinants of the levels and changes in non-executive director compensation

摘要

This study examines the economic and director-specific determinants of non-executive director (NED) compensation in the Australian setting. We find that NED compensation is associated with firm size, complexity, growth, risk and liquidity. It is also associated with director reputation, experience, connectedness and the directors' involvement with the firm. The additional compensation paid to the chairperson is positively associated with their prior experience and negatively associated with NED reputation and involvement. We find inconclusive evidence on the association between changes in NED compensation and firm performance.