In my dissertation I look at the impact of CEOs in three areas. In chapter one I examine the relationship between CEO compensation and CEO turnover during the mid-90s. Corporate proxy statements contain various justifications used to explain the compensation scheme of a particular company. One justification frequently used is that higher CEO compensation reduces exit and increases loyalty. The goal of chapter one was to examine the empirical validity of this justification and the social comparison and equity perspectives associated with it. I find that relative CEO compensation has limited effects on CEO turnover, but that CEO power reduces turnover for poorly performing CEOs, supporting the perspective that strong CEOs control their boards. In chapter two I look at the impact of shareholder activism on corporate charter and by-law provisions. Shareholder activism, in particular, the active role of institutional investors, has been widely heralded as the latest solution to the agency problem of constraining managerial discretion in large American corporations. I find that after the initial wave of shareholder activism in the late 1980s, management learned to manage these new shareholder pressures and regained their traditional support from institutional investors. This resulted in the subsequent reversal of "shareholder-friendly" corporate charters and bylaws changes made during the shareholder rights movement. I conclude that neo-managerial theory, which emphasizes the power of corporate management to control corporate affairs within manageable constraints, remains a valid perspective on corporate control in the United States. Chapter three provides a first investigation of determinants of turnover in the compensation committee. Applying equity theory and a managerial power perspective, I hypothesize that underpaid CEOs will try to indirectly influence their compensation by changing the composition of the compensation committee. The limited findings were contrary to predictions. Various explanations are discussed. Overall, the dissertation findings elucidate conditions under which CEO interests dominate those of shareholders.
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