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Title: Is board of director compensation excessive in restaurant firms?
Authors: Mun, SG 
Paek, S 
Woo, L 
Park, S 
Issue Date: Sep-2019
Source: International journal of hospitality management, Sept. 2019, v. 82, p. 149-158
Abstract: This study confirms that a firm’s size in the previous year significantly increases board of director compensation in the current year, while the number of directors and the firm’s capital expenditure significantly decrease it. On average, 31.2% of restaurant firms overcompensate their board of directors, while 33.8% pay less than the expected amount of compensation to their board of directors. However, contrary to public concern, this study argues that the amounts of over- and under-compensation are negligible in proportion to the directors’ total compensation, and thus the issue of over- and under-compensation may not pose a serious problem in the restaurant industry. In particular, the amount of overcompensation has a positive effect on firm growth and capital investment, but does not substantially decrease firms’ operational and financial performance. The amount of overcompensation can even have a positive influence on financial performance, although the effect is not statistically significant.
Keywords: Board of director compensation
Resource dependence theory
Agency theory
Restaurant firms
Publisher: Pergamon Press
Journal: International journal of hospitality management 
ISSN: 0278-4319
EISSN: 1873-4693
DOI: 10.1016/j.ijhm.2019.04.014
Rights: © 2019 Elsevier Ltd. All rights reserved.
© 2019. This manuscript version is made available under the CC-BY-NC-ND 4.0 license
The following publication Mun, S. G., Paek, S., Woo, L., & Park, S. (2019). Is board of director compensation excessive in restaurant firms? International Journal of Hospitality Management, 82, 149-158 is available at
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