Board Chair–CEO Relationship, Board Chair Characteristics, and Nonprofit Executive Compensation

Abstract

We examine the associations between board chair–CEO relationship, board chair characteristics, and top executive compensation in U.S. nonprofit organizations. Using a sample of 2,153 organization-year observations in our empirical tests, we find a significant positive association between board chair–CEO relationship and top executive compensation. We find that board chair characteristics such as tenure and gender are not significantly associated with top executive compensation. The supplementary analyses suggest that board chair–CEO relationships are positively associated with executive compensation but for only organizations with larger revenues, a bigger board, and a lower change in percentage of program expenses. The findings should be helpful in enhancing the understanding of influencing factors on nonprofit executive compensation.

Keywords

• Governance
• Executive Compensation
• Nonprofit
• Board Chair