Non-executive-independent directors, pay-performance sensitivity analysis of bombay stock exchange (BSE)-260 firms

There are plethoras of studies on CEO's compensation unlike non-executive independent director compensation; this study uses data of independent director compensation to examine the relation between independent director compensation and firm performance by using perspective from agency and institution theory.

The design of the study is for two years 2005 and 2010, from BSE-500 companies listed in India because these two years are crucial for testing the corporate governance policy related to independent directors compensation.

The findings provide opportunistic behavior on part of Independent director in relation to their compensation and shareholders wealth as well weak institution norms with respect to compensation structure.