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CEO Equity-based Compensation, Firm Value, Independent Directors
This paper examines the effect of CEO equity-based compensation (EBC) on firm value. In particular, we study the interaction between EBC and the percentage of independent directors as well as the interaction between EBC and managerial entrenchment. Our findings suggest a positive relation between firms value and EBC. Further, we show that the percentage of independent directors has a positive impact on the marginal effect of EBC on firm value.