Does nepotism run in the family? CEO pay and pay-performance sensitivity in Indian family firms

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dc.contributor.authorChen, Guoli
dc.contributor.authorChittoor, Raveendra
dc.contributor.authorVissa, Balagopal
dc.date.accessioned2023-04-30T14:43:11Z
dc.date.available2023-04-30T14:43:11Z
dc.date.copyright2021en_US
dc.date.issued2021
dc.description.abstractUsing a principal-principal agency theory lens we examine corporate governance and compensation design in family-owned businesses. We conceptualize how CEO pay and pay-performance sensitivity is influenced by whether the CEO is a professional or drawn from the controlling family (family CEO). Data from a sample of 277 publicly listed Indian family firms during 2004-2013 support our argument that family CEOs get paid more than professional CEOs. This pattern is stronger in superior-performing firms that are named after the controlling family (eponymous firms). Furthermore, family CEOs of superior-performing firms have higher pay-performance sensitivity compared to professional CEOs of other superior- performing firms. Our findings reveal nuanced heterogeneity in nepotism in emerging economy family firms – CEO compensation is a mechanism for some controlling families to tunnel corporate resources.en_US
dc.description.reviewstatusRevieweden_US
dc.description.scholarlevelFacultyen_US
dc.identifier.citationChen, G., Chittoor, R., and Vissa, B. (2021). Does nepotism run in the family? CEO pay and pay-performance sensitivity in Indian family firms, Strategic Management Journal, 42(7), 1326-1343. https://doi.org/10.1002/smj.3263.en_US
dc.identifier.urihttps://doi.org/10.1002/smj.3263
dc.identifier.urihttp://hdl.handle.net/1828/15080
dc.language.isoenen_US
dc.publisherStrategic Management Journalen_US
dc.subjectbusiness groupsen_US
dc.subjectCEO compensationen_US
dc.subjectemerging marketsen_US
dc.subjectfamilyfirmsen_US
dc.subjectpay-performance sensitivityen_US
dc.subject.departmentPeter B. Gustavson School of Business
dc.titleDoes nepotism run in the family? CEO pay and pay-performance sensitivity in Indian family firmsen_US
dc.typePostprinten_US

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