Corporate Governance Characteristics of Most Admired Companies
Obeua S. Persons

Abstract
This study compared ten corporate governance characteristics including independent-director compensation of 50 world’s most admired companies to those of their matched not-admired firms. Three significant findings are documented. First, most admired companies had less ownership concentration, a higher percentage of female directors, higher board independence and longer director tenure, and tended to be a founding-family firm. Second, most admired companies provided their independent directors with higher total compensation mainly in cash and stock compensation. Third, most admired companies’ independent-director compensation is made up of a lower percentage of cash and a higher percentage of stock and options than that of their matched companies. This suggests that most admired companies tried harder to align the interest of their independent directors with that of their shareholders by making their directors’ pay more sensitive to overall firm performance. These three findings should be useful for other companies that want to emulate most admired companies’ corporate governance so as to improve their performance.

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