Title: Board diversity, corporate governance quality and excess CEO pay: evidence from South Africa

Authors: Billy Kobina Enos; Ernest Gyapong

Addresses: Kwame Nkrumah University of Science and Technology, Kumasi, Ghana ' School of Accountancy, Massey Business School, Massey University, Tennent Drive, Palmerston North 4474, New Zealand

Abstract: Using a hand-collected data of 185 South African firms, this study examines the effect of board gender and ethnic diversity on excess CEO pay. We document that both board gender and ethnic diversity impact negatively on excess CEO pay. We find that gender and ethnicity have no effect on excess CEO pay in better-governed firms. Our results suggest that female CEOs are associated with lower compensation but ethnic minority CEOs are not. We demonstrate that the pay-gaps faced by female CEOs are inconspicuous in better-governed firms. In contrast, ethnic minority CEOs do not face pay-gaps irrespective of the level of corporate governance quality. Our results are robust to various forms of endogeneity and alternative estimations.

Keywords: board diversity; excess CEO pay; agency theory.

DOI: 10.1504/IJCG.2017.089812

International Journal of Corporate Governance, 2017 Vol.8 No.3/4, pp.175 - 204

Received: 06 Apr 2017
Accepted: 31 Jul 2017
Published online: 12 Feb 2018 *

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