The Board of Directors and Executive Compensation in the Context of Crisis: A Comparative Study Between the United States and France

This study examines whether the characteristics of the board of directors may affect the level of remuneration, for two samples having different systems of governance for the period from 2002 to 2010. Given the importance the financial crisis for executive pay, investigations in executive compensation during periods of crisis are very limited. This study provides a contribution to the literature where we tried to determine if the manager takes advantage of this period of instability. The results indicate the positive impact of the period of crisis on the level of compensation of the U.S. manager, which is not true with his French counterpart. To our knowledge, no study has been conducted on board effectiveness during periods of instability. The results show that during this period this mechanism is unable to control the manager who benefits from excessive compensation.