Grounding in the agency theory, this paper questions whether high quality compensation committee influences\udthe design of executive remuneration towards the alignment of the contrasting interests between managers and\udshareholders. Relying on a comprehensive approach that captures the compensation committee quality based on\uddifferent attributes (i.e. independence, interlocking directorates, directors appointed by minorities) we conduct a\udtwo-step empirical analysis. First, we illustrate the evolution over time of the stock option plan characteristics\udand construct an illustrative diagram that shows the linkages between the attributes of the compensation\udcommittee quality and the elements of the option plans. Second, we run a probit regression analysis to deeply\udinvestigate the picture emerging from the diagram. Our results document that the quality of compensation\udcommittee significantly affects the assignment of incentive stock option plans. The paper evidence advances the\udknowledge in the literature on compensation committee and executive remuneration, by highlighting that\udstructural characteristics of the committee other than independence of its members play a pivotal role in writing\udeffective remuneration contracts for the executives. Our findings are also useful for investors and policymakers
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