Leadership governance, executive compensation design and performance of S&P 500 firms: A comparison of founder and non-founder Chief Executive Officers and leadership teams

This dissertation compares founder-CEOs and non-founder CEOs within the S& P 500 in terms of (a) executive leadership governance, structure, education, and experience; (b) compensation design, and (c) company performance. First, this study develops a rubric for assessing the differences in executive leadership education, experience, and role governance. It then identifies key indicators of compensation design. For both leadership and compensation, it uses these indicators to explain differences in company performance and differences between founder and non-founder CEO leadership governance. As part of the conceptual framework undergirding this dissertation, a hypothesis is developed for utilizing agency theory and stewardship theory to explain differences in compensation design and company performance and between founder and non-founder CEOs. The results indicate that greater disclosure of undergraduate and graduate field and undergraduate degrees from \u27best in class\u27 institutions is significantly related to better company performance. The utilization of performance dependent compensation and the utilization of financial measures in performance compensation are also significantly related to better company performance. Lastly, results denote statistically significant relationships between founder status and the percentage of stock based compensation, affiliated experience and the utilization of financial measures in performance compensation. More specifically, founders have more cash based compensation, have more past board experience and more current board of director leadership positions, have named executive officers with fewer past affiliated positions and utilize fewer financial measures. The findings of this study have implications for executive education, executive selection, compensation design, and company performance