How does board composition affect the boards' remuneration levels? -Evidence from publicly listed Swedish companies

Abstract: The purpose of this study is to investigate the extent to which the composition of the board of directors determines directors’ remuneration in Swedish listed companies. The method approach is quantitative and deductive and a multiple linear regression model analyzes the panel data. The theoretical framework consists of previous research on board compensation and theories such as agency theory, resource dependence theory, and stewardship theory. The study uses publicly available data from a sample of 43 Swedish public companies listed on the Stockholm Stock Exchange, Nasdaq OMX Stockholm Large Cap, from year 2006 to 2013. The findings of the study suggest that board composition does have an impact on the compensation given to the board of directors. Female directors and independent directors show a positive relationship with board of directors’ compensation. Independent directors show a positive relationship with chairman compensation.