The Effects of Internationalization on CEO Compensation
Journal of International Business Studies, Vol. 36, No. 4, pp. 470-483, July 2005
IUI Working Paper No. 611
26 Pages Posted: 23 Aug 2004 Last revised: 26 Sep 2008
Date Written: February 9, 2004
Abstract
This study examines the relation between the internationalization of firms and CEO compensation. Starting from a sample of Norwegian and Swedish listed firms, we analyze the effects of internationalization as manifest in the capital market (international cross-listing), the market for corporate control (foreign board membership), and the product and service market (export and foreign sales). We conclude that all three markets contribute positively to the compensation level of CEOs. We argue that part of the higher CEO compensation in internationally oriented firms - as compared to less internationalized firms within the same country - reflects a risk premium for reduction in job security.
Published with the revised title "The Anglo-American Financial Influence on CEO Compensation in Non-Anglo-American Firms".
Keywords: CEO compensation, internationalization, corporate governance, CEO tenure, cross-listing, foreign board membership
JEL Classification: G34, K12, M10, M12
Suggested Citation: Suggested Citation