External CEO directorships affect shareholder returns, says research
Research finds that while chief executives in the US with external directorships earn more, returns for shareholders fare less well.
Photo: Shutterstock
US chief executives with no external board directorships earn better returns for their shareholders than those with seats on external boards, according to new research.
Research firm Equilar studied the S&P500 and found that, of the 37 companies where CEOs held outside directorships, the one-year total return on stocks was 8.2%. For CEOs who held a single or no additional board position, that figure was a little more than 15%.
The research also found that CEOs with two or more external directorships made $13.6m from their main employer, while those with a single additional board position, or none at all, took home 5.6% and 12.9% les
For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda
Related Stories
-
Digital disruption: how will Covid-19 affect the future of work?
The pandemic is forcing a mass upgrading of our digital literacy—and the ability of businesses and individuals to adapt to new ways of working.
-
Theresa May’s worker representation proposal fails to gain support
Research shows companies are choosing the 'safe option' when it comes to employee representation on boards.
-
Disquiet after governance reform fails to appear in Queen’s Speech
The absence of corporate governance reform details from the government’s legislative agenda has caused concern in the business community.
