Working Paper No. 611

The Effects of Internationalization on CEO Compensation

Publicerad: February 9, 2004; Published in Journal of International Business Studies, 2005, Vol. 36, No. 4, pp. 470-483Antal sidor: 26Nyckelord: CEO Compensation; Internationalization; Corporate Governance; CEO Tenure; Cross-Listing; Foreign Board Membership JEL-koder: G34; K12; M10; M12

The Effects of Internationalization on CEO Compensation Lars Oxelheim and Trond Randøy


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.

 

Lars Oxelheim

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