The Anglo–American Financial Influence on CEO Compensation in Non–Anglo–American Firms

This study examines the impact of Anglo-American financial markets on CEO compensation. Starting from a sample of Norwegian and Swedish listed firms, we analyse this effect as manifested in the capital market (Anglo-American cross-listing) and in the market for corporate control (Anglo-American board membership). These effects are analysed together with the geographically broader effect of the product and service market internationalisation of the firm. We conclude that all three effects contribute positively to the level of CEO compensation. We argue that the higher CEO compensation found in firms exposed to Anglo-American financial influence – as compared with firms not subject to such influence – reflects institutional contagion, the demand for and supply of viable CEO candidates, and a pay premium for increased risk of dismissal.