Non-executive-Independent Directors, Pay-performance Sensitivity Analysis of Bombay Stock Exchange (BSE)-260 Firms

Abstract

There are plethoras of studies on CEO’s compensation unlike non-executive independent director compensation;  this study uses data of independent director compensation to examine the relation between independent director  compensation and  rm performance by using perspective from agency and institution theory.  The design of the study is for two years 2005 and 2010, from BSE-500 companies listed in India because these two  years are crucial for testing the corporate governance policy related to independent directors compensation.  The  ndings provide opportunistic behavior on part of Independent director in relation to their compensation and  shareholders wealth as well weak institution norms with respect to compensation structure.