Date of Award


Degree Type


Degree Name

Doctor of Philosophy


Business Administration

Major Professor

Bruce K. Behn

Committee Members

Donald J. Bruce, Linda A. Myers, Terry L. Neal


Executive compensation has long been a hot topic for regulators, investors and the business press, usually because of a misalignment of performance and CEO compensation. CEO compensation is an important topic because it can have a major impact on firms’ ability to attract and retain talented CEOs. The Dodd-Frank Act, passed in 2010, and resulting updated compensation committee rules have increased the scrutiny of compensation committees as they set and monitor executive pay. Additionally, Hoitash et al. (2012) and Manchiraju et al. (2016) call for firms to include directors with financial or accounting expertise on their compensation committees to improve performance measurement and executive compensation contracting. Using the presence of a certified public accountant (CPA) on the committee to proxy for accounting expertise, I investigate the association between accounting expertise on the compensation committee and several aspects of CEO compensation. I find that the percentage of firms with accounting expertise on the compensation committee has doubled over my sample period. I find evidence that accounting expertise on the compensation committee is associated with increased pay-for-performance sensitivity when performance is measured using stock returns. However, in areas where accounting expertise should be most beneficial, including pay sensitivity to accounting-based measures of performance, and compensation shielding from misclassified negative special items, I find no evidence of a significant impact. This study contributes to the literature on CEO compensation and the literature on corporate boards and is the first large sample study on the association between accounting expertise on the compensation committee and CEO compensation.

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