Document Type

Conference Paper

Publication Date




Conference Name

The 25th European Financial Management Association (EFMA) Conference, Basel Switzerland


Uncertainty about a CEO’s ability is related to his/her length of service to a firm. Accordingly, monitoring systems should vary depending upon CEOs’ tenure. Long-tenured CEOs require less monitoring because their ability has been revealed over time. However, as CEOs advance in their careers, they are more likely to acquire power to influence board decisions. To analyze this implication, I use the previously reported differential sensitivity of CEO cash compensation to income-increasing and decreasing disposals. Contrary to prior findings, I find that cash compensation for long-tenured CEOs is positively associated with both income-decreasing but is shielded from income-increasing divesture decisions.

Original Publication Citation

Saito, Y. (2016). Is cash compensation for long-tenured ceos efficiently allocated? Paper presented at the The 25th European Financial Management Association (EFMA) Conference, Basel, Switzerland.