Director Member Properties and a Dual-Class Structure

Abstract

In dual-class companies, management controlling the voting rights is able to choose or influence director board to further entrench itself or increase benefits of all shareholders. This study compares the board director members’ characteristics and their effects on the adoption of performance-based stock awards and the corresponding number of performance measures. The main results show that in terms of the influence of board members on the adoption of performance-based stock awards and on the numbers of performance measures, strong board properties such as a larger board size and more independent directors increase the propensity for the adoptions, but the dual-class structure decreases the propensity to a certain degree.