Board Structure, CEOs Compensation and US Energy Firms Performance: A Data Panel Analysis

This study investigates the impact of corporate governance, specifically board composition and CEO compensation, on the financial performance of oil and gas companies in the United States. Relying on a sample of 95 major publicly traded U.S. energy firms from 2006 to 2019, and employing a panel data analysis methodology, the study finds that board size has a positive and significant effect on financial performance. As anticipated, board independence plays a crucial role in enhancing firm performance. Moreover, CEO duality is positively associated with the sales growth of oil and gas companies. Conversely, CEO compensation exhibits a strong and statistically significant negative impact on financial performance. Additionally, the age of the CEO is found to negatively affect firm performance. This paper contributes to a deeper understanding of board governance dynamics within the U.S. oil and gas sector and offers insights into the optimal board structure that can enhance corporate stability and support the broader stability of global energy markets.