This study investigates how stock liquidity affects the compensation incentives faced by the directors on the board. The results show that the proportion of cash-based compensation in the directors' compensation package increases when the firm's shares are less liquid: a one standard deviation increase in the bid-ask spread from the mean is associated with a 3% larger fraction of cash in the directors' compensation package. The effect is more pronounced for firms whose management does not issue Earnings Per Share (EPS) guidance and for firms whose Chief Executive Officers (CEOs) themselves have higher pay in cash and lower pay in the form of equity. These results suggest the compensation incentives offered to directors in firms with illiquid shares result in the interests of shareholders being less aligned with those of the directors compared with firms with liquid shares.

中文翻译：

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股票流动性和董事薪酬

本研究调查了股票流动性如何影响董事会董事面临的薪酬激励。结果表明，当公司股票的流动性较低时，基于现金的薪酬在董事薪酬方案中的比例会增加：买卖差价与均值的一个标准差增加与现金比例增加 3% 有关在董事薪酬方案中。对于管理层未发布每股收益 (EPS) 指引的公司，以及首席执行官 (CEO) 本身现金薪酬较高而股权形式薪酬较低的公司，这种影响更为明显。