Title: How does family firm heterogeneity affect CEO compensation?

Authors: Paulo Neto; António Cerqueira; Elísio Brandão

Addresses: School of Economics and Management, University of Porto, Portugal ' School of Economics and Management, University of Porto, Portugal ' School of Economics and Management, University of Porto, Portugal

Abstract: This study aimed to understand how CEO compensation in family firms is influenced by their heterogeneity dimensions. Using a sample of companies listed in the S&P 500 Index, between 2007 and 2016, the results of this study show that CEO compensation is higher when the family representation is multiple and when the CEO is professional. In addition, it is shown that the compensation of professional CEOs is less sensitive to the number of family representatives on the board and that family firms are more effective in keeping CEO compensation under control than non-family firms. The findings of this study contribute to the literature on the governance of family firms by identifying the features that make them more effective in terms of CEO compensation.

Keywords: family firms; heterogeneity dimensions; generational stage; family representation; family CEO; professional CEO; CEO compensation; agency theory; stewardship theory; corporate governance.

DOI: 10.1504/JIBED.2025.148811

Journal for International Business and Entrepreneurship Development, 2025 Vol.17 No.2, pp.161 - 196

Received: 17 Feb 2023
Accepted: 22 Mar 2024
Published online: 26 Sep 2025 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article