Governance structures, unions, and their relation to CEO pay

Corporate scandals and the advocacy of austerity measures have led to increased board oversight and increased stakeholder outcry over corporate executive compensation packages. This paper, using a sample of firms listed on the S&P/TSX composite index, finds while Boards of Canadian companies have become more ethical and effective, the extra scrutiny has been associated with an increase in the magnitude of the non-equity components of CEO compensation. CEOs have been able to extract higher salaries and bonuses even as their companies steer through the financial and economic crisis. Using a fixed-effects-specification, this paper further finds that companies that tend to be more heavily unionized pay their CEOs less in terms of the equity components of the compensation package. Overall, the paper suggests that CEOs have been recession-proof in that despite the recent stock market difficulties, they have been able to hold more or less similar levels of compensation. Governance structures and unions have not exerted enough pressure to curb the trend