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Corporate Performance and Managerial Remuneration: An Empirical Analysis
Abstract
Economic theories of efficient compensation predict a positive relationship between executive pay and corporate performance, and yet efforts to document this relationship have been largely unsuccessful. In this paper, we argue that previous cross-sectional studies have omitted important variables which seriously bias their results. Using data that focus on individual executives over time, we find that executive compensation is strongly positively related to corporate performance as measured by shareholder return and growth in firm sales. The results are robust to the stock market performance measure utilized.
... It also addresses the horizon problem among regional heads, conducting tests within the public sector context. Meanwhile, Murphy (1985), Jensen and Murphy (1990), Rose and Shepard (1997), Matta and Beamish (2008), Ali and Zhang (2015), and Fang et al. (2018) argue that incoming CEOs who are on the brink of retirement or the conclusion of their tenure exhibit different behavior, affecting the levels of performance in steering their organizations. ...
... The horizon problem can be defined as actions taken by motivated managers who have enough time to grow the company, resulting in them receiving increased compensation and prestige. Conversely, managers lose motivation if they are about to retire or leave the company soon, making them reluctant to grow the company at the end of their tenure, as the successor will enjoy the success (Murphy, 1985;Jensen & Murphy, 1990;Rose & Shepard, 1997). Many studies have been done on the horizon problem in the business sector. ...
... This means that horizon problems do not affect financial performance. The results of this study do not support previous studies conducted by Murphy (1985), Jensen and Murphy (1990), and Rose and Shepard (1997), who report that managers lose motivation when they are about to end their tenure. However, this study's results concur with Matta and Beamish (2008), Ali and Zhang (2015), and Fang et al. (2018), who state that newly appointed CEOs have long-term motivation. ...
Regional autonomy is expected to promote financial performance and people’s welfare. This study investigates factors that affect local governments’ financial performance in Indonesia, where performance is defined as the ability to generate local revenues. To test our hypothesis, we used panel data regression analysis. From 2012 to 2019, this study collected 3,747 observations on municipal governments. The dependent variable is local government financial performance, while the independent variables include region size, capital spending, financial reporting quality, audit recommendations, and the horizon problem. We find that the size of the local government, financial reporting quality, and the follow-up on audit recommendations positively affect financial performance. Larger local governments have more resources to generate revenues. High financial reporting quality and accountability are supposed to improve public trust and increase their willingness to make contributions through local tax payments. Capital expenditure, on the other hand, is associated with lower financial performance. This study contributes to the literature on financial performance, especially in the public sector, by providing empirical evidence on factors affecting local government financial performance. This study provides insight to stakeholders by providing evidence on the role of size, capital spending, audit opinion, and follow-up of audit recommendations in accelerating the improvement of financial performance. Received: 13 July 2023 / Accepted: 25 August 2023 / Published: 5 September 2023
... ( Parker and Kohlmeyer, 2005) [32] According to Rosen (1982) [33] the deciding factor for the position of any individual in the hierarchy is his talent, higher the level of talent in any individual higher will be his position in the hierarchy. Promotion has its importance due to the fact that it carries with it a significant change in the wage package of an employee (Murphy, 1985) [34]. Carmichael (1983) [35] said that promotion enhances the yield of an organization when an employee climbs a promotion ladder on the basis of his seniority and resultantly he gets an increased wage rate. ...
... ( Parker and Kohlmeyer, 2005) [32] According to Rosen (1982) [33] the deciding factor for the position of any individual in the hierarchy is his talent, higher the level of talent in any individual higher will be his position in the hierarchy. Promotion has its importance due to the fact that it carries with it a significant change in the wage package of an employee (Murphy, 1985) [34]. Carmichael (1983) [35] said that promotion enhances the yield of an organization when an employee climbs a promotion ladder on the basis of his seniority and resultantly he gets an increased wage rate. ...
This study examines the relationship between job attitude and promotions in selected electronics companies inMetro Manila, Philippines. Focusing on whether specific attitudes contribute to career advancement, the research utilized aquestionnaire to assess job involvement, efficiency, and organizational commitment among 305 employees from companies likeAdvantix Marketing, EMF Corporation, Gakken Philippines, Kolin Inc., and ASERCO. Analysis using Pearson correlationrevealed significant relationships: job involvement showed a negative but significant correlation with promotion, while jobefficiency and organizational commitment positively correlated with it. These findings suggest that while job involvement maynot directly lead to promotions, efficiency and commitment are key attitudes for career advancement.
... ( Parker and Kohlmeyer, 2005) [32] According to Rosen (1982) [33] the deciding factor for the position of any individual in the hierarchy is his talent, higher the level of talent in any individual higher will be his position in the hierarchy. Promotion has its importance due to the fact that it carries with it a significant change in the wage package of an employee (Murphy, 1985) [34]. Carmichael (1983) [35] said that promotion enhances the yield of an organization when an employee climbs a promotion ladder on the basis of his seniority and resultantly he gets an increased wage rate. ...
... ( Parker and Kohlmeyer, 2005) [32] According to Rosen (1982) [33] the deciding factor for the position of any individual in the hierarchy is his talent, higher the level of talent in any individual higher will be his position in the hierarchy. Promotion has its importance due to the fact that it carries with it a significant change in the wage package of an employee (Murphy, 1985) [34]. Carmichael (1983) [35] said that promotion enhances the yield of an organization when an employee climbs a promotion ladder on the basis of his seniority and resultantly he gets an increased wage rate. ...
This study examines the relationship between job attitude and promotions in selected electronics companies in Metro Manila, Philippines. Focusing on whether specific attitudes contribute to career advancement, the research utilized a questionnaire to assess job involvement, efficiency, and organizational commitment among 305 employees from companies like Advantix Marketing, EMF Corporation, Gakken Philippines, Kolin Inc., and ASERCO. Analysis using Pearson correlation revealed significant relationships: job involvement showed a negative but significant correlation with promotion, while job efficiency and organizational commitment positively correlated with it. These findings suggest that while job involvement may not directly lead to promotions, efficiency and commitment are key attitudes for career advancement.
... Thus, the manager has less incentive to take actions that negatively affect the company's performance, which minimizes agency costs. Several studies have shown a negative and strong correlation between performance and CEO remuneration (Murphy, 1985;Kato & Long, 2006). Crutchley and Hansen (1989) predicted that using debt will reduce agency conflict. ...
... However, research on this relationship has yielded mixed results. Several previous studies have shown a positive and strong correlation between performance and CEO remuneration (Murphy, 1985;Kato & Long, 2006). Meanwhile, researchers have found a positive correlation between performance and CEO remuneration Conyon, 1997). ...
The objective of this study is to investigate various aspects, including endogenous and exogenous corporate factors, affecting the agency costs of supply chain companies in Asia. This study uses two methods: ordinary least squares and panel data fixed effects (FEM and REM). The data were collected by hand from many sources for 2015-2020. After controlling for unobserved sample-specific fixed effects, this paper proves that board size, salary, institutional ownership, audit committee, and independent commissioner have no statistical significance. Meanwhile, the remaining three variables, leverage, state ownership, and C/A, have a significant impact on agency costs. Firms with high levels of debt will be controlled by the debtor, and thus, managers are less likely to commit self-seeking; the government has an incentive to control the company tightly and effectively, and when the firm has more money, it has to incur more agency costs. The results indicate that the adoption of individual corporate governance attributes has no impact on firm-level agency costs within a private and voluntary contracting setting. However, a higher level of compliance with an overall governance index variable, which represents the current requirements, is associated with significantly lower agency costs. Furthermore, the positive influence of voluntary governance compliance on agency costs remains consistent regardless of the firm's ownership structure. Our research results contribute to providing a broader understanding of agency costs within a specific field, such as the supply chain. The findings of this study can be valuable for managers in mitigating conflicts between CEOs and shareholders. Additionally, investors will have additional tools to identify potential businesses for investment, enabling them to avoid companies with excessively high agency costs.
... These incentives are sometimes referred to as capital incentives, since they leverage the stated values on the stock exchange to motivate executives to exert the requisite efforts in order to achieve an increase in share price. Murphy (1985) discovered a robust positive correlation between executive compensation and both performance and sales. Additionally, Murphy (1985) emphasized the significance of incorporating variables to measure shareholder return. ...
... Murphy (1985) discovered a robust positive correlation between executive compensation and both performance and sales. Additionally, Murphy (1985) emphasized the significance of incorporating variables to measure shareholder return. However, classic works such as Copeland et al. (2007) attribute the emergence of subsequent empirical studies on the correlations between executive remuneration and shareholder return to the pioneering work of Jensen and Murphy (1990). ...
This review seeks to synthesize empirical findings on financialization policies and provide answers to two questions: (1) What relationship exists between Financialization and Corporate Governance? (2) Is there any relationship between financialization and CEO compensation/remuneration systems? A group of 38 scientific articles was selected using the methodological protocols ProKnow-C and Methodi Ordinatio. Based on its reading, analysis, and synthesis of the main empirical findings between financialization and the accumulation of capital and between financialization and income distribution, it is evident that there is a negative correlation between this phenomenon and the investment in means of production and the proportion of income from labour. We hope that this work can contribute to a rethinking of the income redistribution model (internationally), as the current model has contributed to an increase in the unequal distribution of social wealth, which is characterized primarily by the excessive compensation of top executives who prioritize short-term goals. We hope that it can also serve as a foundation for future scientific work and as a resource not only for regulatory agencies but also for government entities that must make political, economic, and fiscal decisions to mitigate or even reverse the global effects.
... No entanto, nem sempre é o que ocorre: a teoria e a prática acerca dos contratos de remuneração caminham distantes e não há o uso do que prevê a teoria quando do desenho destes contratos (Baker, Jensen & Murphy, 1988;Almadi & Lazic, 2016). Os estudos seminais apontaram para a existência de relação entre remuneração e aumento de vendas, mas não necessariamente para melhora de performance (Murphy, 1985;Jensen & Murphy, 1990;Conyon & Gregg,1994;Conyon & Leech, 1994). ...
... As companhias apresentaram em média ativo total de US$ 22,3 bilhões. Murphy (1985) A análise da regressão anterior rejeita H1 e não permite afirmar, estatisticamente, que a persistência de lucros afeta a remuneração executiva. Os achados contrariam o estudo de Ashley e Yang (2004), em que os autores afirmam que os pacotes de remuneração executiva estão atrelados à persistência de lucros. ...
Verificou-se a relação entre a remuneração executiva e a qualidade do lucro como forma de mitigação do problema de gerenciamento de resultado para obtenção de maiores remunerações, por parte dos executivos. Foram analisadas 288 empresas que divulgaram as informações sobre remuneração executiva no período de 2008 a 2017, de países que compõem a União Europeia, por meio de regressão por dados em painel com efeitos fixos. Os resultados permitem afirmar que os pacotes de remuneração executiva são influenciados pela magnitude de accruals e suavização de resultados. Executivos que lançam mão de accruals e de práticas de suavização de resultados observam maiores remunerações. Por outro lado, não foi possível identificar relação entre persistência de lucros, tempestividade no reconhecimento de perdas e a remuneração executiva, fato que não permite afirmar que estas duas proxies apresentam influência sobre os pacotes de remuneração. As variáveis de controle de tamanho, endividamento de curto prazo, retorno contábil, retorno de mercado e governança corporativa apresentaram significância estatística. A principal contribuição do estudo é a evidenciação de que, para este período e amostra, os pacotes de remuneração não sofreram influência de todas as métricas de qualidade do lucro, apenas pelo uso de accruals e suavização de resultados, combinados com o retorno das ações no mercado acionário, o que sugere, segundo a literatura, um desalinhamento entre os interesses de longo prazo de investidores e seus executivos.
... For example, by providing cash or stock plus option compensation incentives based on the company's profit performance (Flor et al. 2014;Rhodes 2016). According to agency theory, incentives for managers are very positively related to company performance, for example measured by shareholder return and sales growth (Baber et al. 1996;Jensen and Meckling 1976;Murphy 1985). ...
... This is consistent with agency theory which states that when an agent is evaluated for performance by the principal, the agent will try to show his best performance. Incentives for managers are positively correlated with firm performance (Baber et al. 1996;Jensen and Meckling 1976;Murphy 1985). When performance-based incentives have not been achieved, managers tend to act more rationally so that they benefit themselves and the owner, at least in the short term (Lohmann 2015). ...
This study aims to examine whether managerial optimism and profit-based incentives affect cost behavior asymmetry, especially cost stickiness. Differ from previous literature on cost stickiness, the researchers use an experimental 2 × 2 between-within subjects factorial design. This design allows us to use data related to cost management specifically, not just in general term as in studies using archival data from public financial statements. Our study results reaffirm cost stickiness literature. This study focuses on experiments among accounting students who are not knowledgeable about cost behavior asymmetry. Even though our 71 student participants know only the symmetric cost behavior theory, when presented with a scenario related to sales prospects and information on profit-based incentives, the results of this study show otherwise. When participants are more optimistic and profit-based incentives have been achieved, the level of cost stickiness is also higher.
... The reason for the increased conflict between management and owners is that the two may not have the same risk aversion, or management have an incentive to empire-building, or have its own interests. The free cash flow theory (Jensen, 1986;Murphy, 1985) postulates that managers may use cash that exceeds the amount needed to finance valuable projects for their own interest. Moreover, the moral hazard model postulates that managers may focus on their own interest and make investment decisions that are far from the investment optimal level. ...
In this paper, we investigate the role of short-term debt in investment efficiency , and we examine the impact of the firm's life cycle stages on this relationship. Using data from non-financial companies in the United States from 1971 to 2021, we argue that the short-term debt may reduce the information asymmetries and discipline the management decisions, thus improving the investment efficiency. We argue, however, that the relationship varies throughout different life cycle stages. We find that short-term debt positively influences investment efficiency and over-investment. Furthermore, the firm's life cycle significantly impacts investment efficiency, with the introduction and growth stages negatively associated with it. The life cycle also affects the relationship between short-term debt and investment efficiency, particularly during the growth stage. These results emphasis the role of short-term debt and the firm's life cycle in mitigating information asymmetries and shaping management behaviour. K E Y W O R D S financing decision, firm's life cycle, information asymmetries, investment decision, investment efficiency, short-term debt
... Tourism, inherently cyclical in nature, engenders fluctuating demands within the hospitality sector (Murphy, 1985). Destinations often witness heightened demand during specific seasons and weekends, compared with prolonged phases of diminished occupancy. ...
Given the competitive and dynamic nature of the hospitality sector, understanding factors affecting employee retention is vital for success. This paper explores family business dynamics, by addressing the employees' justice perceptions, turnover intentions, and resilience levels in the hotel industry. Our findings from 205 Portuguese employees challenge the belief that employees working in family firms have higher organizational justice perceptions. However, employees in family firms exhibit lower turnover intentions and higher resilience than those in non-family companies. Additionally, in family firms, organizational justice perceptions negatively correlate with turnover intentions, with employees' resilience mediating this relationship.
... The agency relationship is in which one party, called a principal delegates authority to another one -an agent (Young and Buchholtz, 2002). There is a positive relationship between executive remuneration and firm performance (Murphy 1985;Jensen and Murphy, 1990;Ramswamy et al., 2000). However, some studies report no relation between executive compensation and firm performance (Firth et al., 2006;Parthasarathy et al., 2006), and others indicate an unexpected negative association (Malmendier and Tate, 2009;Balafas and Florackis, 2013;Cooper et al., 2013). ...
Banks’ CEO Compensation has received massive attention in recent years because of the poor performance and lots of controversies have been revealed in the banking sector of Bangladesh. Compensation of CEO plays a pivotal role to meet the company’s objectives or shareholders goals. The vast majority of studies that have examined the relationship between senior executive remuneration and firm performance have adopted an agency theory perspective and have concentrated upon the presumed incentive and control aspects of the relationship (Main 1991, Pavlik et. al. 1993). As Jensen and Meckling (1976) and Fama and Jensen (1983 a, b) have suggested that within the context of agency theory, the writing of employment contracts is an important means by principle (shareholders or their representatives and non-executive directors) can control the activities of the agent (senior management). From an agency theory perspective, where it is usually assumed that the principal is either risk-neutral or risk-averse and the agent is assumed to be both risk-effort and risk-averse, contracts have both insurance and incentive effects. In situations where the agent’s efforts and outputs are observable the principal can eliminate shirking by the agent through monitoring. (Holmstrom 1979) and the agent’s compensation will be a flat wage irrespective of the level of output. This clearly establishes a strong link between firm performance and executive compensation.
... These are expected to influence the riskiness of the firm indirectly through their influence on compensation incentives. According to Murphy (1985), the ability of a manager is usually unknown during his early years. Thus, firm performance is used to appraise a manager's ability, which affects PPS. ...
Purpose
Given the serious question raised by the subprime of the 2008 global financial crisis over the rising practices of excessive rewarding of executives in the USA and European firms, the executive pay-performance nexus has emerged as a popular topic of debate in the contemporary corporate finance research. Conducted mostly on the Anglo-Saxon contexts, research outcomes have been inconclusive and dichotomous. Considering this backdrop, this study aims to investigate the endogenous relationship between executive compensation and risk taking in the context of the USA.
Design/methodology/approach
Using a large sample of non-financial firms from 2010 to 2020 based on panel data and two-stage least square regression. In this study, the riskier corporate decision is measured as book leverage and ratio of R&D expense to total assets. Chief executive officers’ (CEO) experience and age are used as instrumental variables, and these are expected to influence compensation incentives and, hence, affect firm riskiness indirectly. Firm size, return on assets and CEO turnover are reported to affect compensation and corporate decisions, therefore, included as control variables. Given that higher executive compensation is related to riskier corporate decision in firms, this study incorporates total wealth (i.e. accumulated equity related compensation) as an additional proxy of compensation, and this selection is justifiable by the perfect contracting notion of the agency theory.
Findings
The results of this study show a significant positive and increasing nexus among compensation and riskier corporate decisions. Besides, the compensation level proxied through the percentage of each form of compensation in total compensation is very important as greater equity and greater salary diminishes risk taking.
Practical implications
The outcomes of this study have useful implications for firm stakeholders and policymakers.
Originality/value
The level of pay measured by the percentage of each type of compensation in total compensation is of utmost importance as it can increase or decrease risk taking in corporate decisions.
... En este caso el desempeño suele ser medido según los resultados a corto plazo (beneficios contables del año anterior o crecimiento de los beneficios) o según se superen los objetivos establecidos para ellos. Este sistema se basa en la relación directa que MURPHY (1985), COUGHLAN y SCHMIDT (1985) y BENSTON (1985), entre otros, han verificado entre la retribución de los directivos y el resultado o performance de la empresa. Sin embargo, también plantea diversos inconvenientes: ...
Los mecanismos de incentivos aplicados a los directivos empresariales, basados en conceptos retributivos, refuerzan, al menos parcialmente, los incentivos individuales para que los directivos sean responsables de sus acciones y para que sus intereses personales estén en la línea de los objetivos de la propiedad. Dentro de estos sistemas, el artículo se centra en los planes de opciones de compra sobre acciones o stock options, analizando sus orígenes, sus principales ventajas e inconvenientes y comparándolos con otros sistemas de incentivos para la dirección. Asimismo, el artículo ofrece una aproximación a la vigencia de los planes de stock options como incentivos, a sus efectos sobre los resultados de la gestión de los directivos que se benefician de los mismos y a la consideración que tienen en los códigos éticos de gobierno de empresas. Se deduce que la motivación, fidelidad e integración de las personas que componen una organización son valores fundamentales para el desarrollo óptimo del negocio, por lo que aplicar un adecuado sistema de incentivos que mantenga y fidelice a los empleados y directivos valiosos puede mejorar los resultados empresariales. Pero conseguir la forma retributiva adecuada para motivar al directivo es una tarea muy compleja en la práctica empresarial. El enfoque de agencia apuesta porque se utilicen componentes variables dentro de la compensación total. Sin embargo, la decisión sobre la forma que deben adoptar esos elementos variables debe ser analizada por cada empresa evaluando las ventajas e inconvenientes de cada una de ellas. Por otra parte, en muchas ocasiones, el problema no son los sistemas de incentivos, sino las conductas oportunistas derivadas de la información privilegiada de los propios directivos.
... Therefore, management may try to extract pecuniary and non-pecuniary benefits from the fmn, while transferring some or all of the costs incurred to the outside shareholders. An important source of such benefits to them may be managerial empire building and entrenchment (Murphy, 1985;Jensen, 1986). ...
... However, this payment will decrease the firm's resources under the manager's supervision and then reduce the manager's power. Therefore, managers tend to spend, invest, expand, and let firms grow beyond their optimal size, this growth not only increases their power but also increases their wages according to Murphy (1985). The free cash flow theory is built on the basis of the beneficial conflict between managers and shareholders in using free cash flow. ...
The decision on dividend policy is one of the most important decisions in the financial sector which still has inconsistent results leading to various debates among researchers. This study aims to examine the impact of the factor of the free cash flow (FCF) and the firm’s life cycle (RE/TE) on the dividend payout ratio. A panel data of 110 listed firms from the period 2014 - 2020 on Ho Chi Minh stock exchange (HOSE) are used to test the hypothesis. The estimators used to analyze the data are fixed effect model (FEM), random effect model (REM), and then generalized method of moments (GMM) applied to remedy the common errors of panel data. The finding shows that firms in the growth stage will use the free cash flow to invest in a profitable project instead of paying dividends to shareholders. In the meantime, other firm characteristics such as firm size, return on assets, and debt have a positive impact on the dividend payout ratio.
... Consequently, the availability of internal short-term funds to corporate finance executives are the driving force to manage their firms smoothly for superlative optimal growth levels. Murphy (1985) posits that management has propensity of influence through supervisory oversight and control on the decision to increase the magnitude of the firm's internal resources available for their corporate growth. The ability to intensify the growth of a firm's internal resources creates an avenue for the enhancement of management executive package, promotion and filling of higher position of responsibility in order to spur their corporate revenue and produce higher performance indicators for growth (Jensen, 1991;Jensen, 1988;Jensen, 1986;Jensen & Meckling, 1976). ...
In today's dynamic and competitive business environment, solvency is a critical success factor that strategically enables a firm to structure their resources in meeting their financial obligations on the short, medium and long-term bases. However, the inability of a firm to maintain acceptable level of financial stability threatens its future growth. A company's inability to sustain robust solvency portends the firm's sick state that impairs its organic growth rate. Firms' improper utilization of their unique characteristics as their corporate strategic drivers has given rise to illiquidity causing existential threat among listed firms in Nigeria. This study examines the effect of firms' characteristics on solvency of selected listed companies in Nigeria. The study adopted ex-post facto research design. The population of the study was 161 listed companies in Nigeria as at 31st December 2020 with a chosen sample size of 111 purposively determined. Secondary data extracted from the published audited financial statements covering a 10-year period (2011-2020) were used for the study. Descriptive and inferential (multiple regression) statistics were employed to analyze the data. Findings revealed that corporate strategic drivers had joint significant effects on short-term solvency and long-term solvency. The study concludes that corporate strategic drivers exert significant influence on solvency of listed firms in Nigeria. The study recommends that firms should continue to utilize their corporate strategic characteristics to drive their short-term and long-term solvency statuses.
... Consequently, the availability of internal short-term funds to corporate finance executives are the driving force to manage their firms smoothly for superlative optimal growth levels. Murphy (1985) posits that management has propensity of influence through supervisory oversight and control on the decision to increase the magnitude of the firm's internal resources available for their corporate growth. The ability to intensify the growth of a firm's internal resources creates an avenue for the enhancement of management executive package, promotion and filling of higher position of responsibility in order to spur their corporate revenue and produce higher performance indicators for growth (Jensen, 1991;Jensen, 1988;Jensen, 1986;Jensen & Meckling, 1976). ...
In today’s dynamic and competitive business environment, solvency is a critical success factor that strategically enables a firm to structure their resources in meeting their financial obligations on the short, medium and long-term bases. However, the inability of a firm to maintain acceptable level of financial stability threatens its future growth. A company’s inability to sustain robust solvency portends the firm’s sick state that impairs its organic growth rate. Firms’ improper utilization of their unique characteristics as their corporate strategic drivers has given rise to illiquidity causing existential threat among listed firms in Nigeria. This study examines the effect of firms’ characteristics on solvency of selected listed companies in Nigeria. The study adopted ex-post facto research design. The population of the study was 161 listed companies in Nigeria as at 31st December 2020 with a chosen sample size of 111 purposively determined. Secondary data extracted from the published audited financial statements covering a 10-year period (2011–2020) were used for the study. Descriptive and inferential (multiple regression) statistics were employed to analyze the data. Findings revealed that corporate strategic drivers had joint significant effects on short-term solvency and long-term solvency. The study concludes that corporate strategic drivers exert significant influence on solvency of listed firms in Nigeria. The study recommends that firms should continue to utilize their corporate strategic characteristics to drive their short-term and long-term solvency statuses. Keywords: Corporate Strategic Drivers, Financial strategy, Firms’ Characteristics, Long-term solvency, Short-term solvency
... However, a high degree of ownership concentration may demotivate rent-seeking behavior in low-litigation-risk countries, such as Australia. Large firms with more complex operations are documented to have greater shareholder dissatisfaction, because they tend to draw more attention from shareholders and offer higher levels of executive compensation (Murphy 1985;Core et al. 1999). Table 3 presents the results of estimating model (1) using alternative sample periods in different columns. ...
This study assesses the impact of minority shareholder empowerment via lower defeat thresholds in “say-on-pay” votes on CEO compensation and career prospects for directors. We exploit the adoption of the Australian “two-strikes” rule as a quasi-exogenous shock, which empowers shareholders to vote on board dismissal if a firm’s remuneration report receives 25 percent or more dissent votes for two consecutive years. Using a difference-in-differences methodology, we find that firms respond to a “strike” by curbing excessive CEO pay. Under the two-strikes regime, independent directors are held more accountable for poor oversight and experience significant reputational penalties in terms of turnover and the loss of outside directorships subsequent to receiving a strike. The results are mainly driven by firms receiving a nonmajority strike, indicating that the effectiveness of the two-strikes regime stems largely from the lower defeat threshold.
Data Availability: Data are available from the public sources cited in the text.
JEL Classifications: G34.
... Brush et al. (2000) found that sales growth was most beneficial to firms lacking free cash flows. Free cash flows are associated with increases in managers' compensation because changes in compensation are positively related to the growth in sales (Murphy, 1985). To motivate managers to disgorge the cash rather than investing it at below the cost of capital or wasting it on organization inefficiencies (Jensen, 1986) proposed increased dividend payments to shareholders, share repurchases and use of debt to promote organizational efficiency and deal with the agency conflict. ...
The purpose of this paper is to create awareness of a number of existing theories in Finance area of specialization. The compilation and analyses on the theories will help scholars quickly identify theories existing in finance and application of the theories in a scholarly manner. However the theories analyzed are not exhaustive. Scholars are allowed to add to the list of analyses.
... Jensen (1986) showed that managers would not distribute a large amount of free cash to shareholders, but would rather use it to expand the size of the firm in order to obtain more control rights and higher salaries, resulting in serious absinvestment behavior. Murphy (1985) proved that managers would blindly expand the size of the firm with the aim of obtaining excessive control over resources, resulting in serious absinvestment behavior. Morck et al. (1988) indicated that in addition to obtaining excessive control rights, managers are likely to prefer more resources for the projects that are beneficial to their own development in order to ensure job security, and these projects often do not aim at enterprise value maximization. ...
... The compensation committee is an important element of the corporate governance structure, since it may heavily contribute to reducing agency Nicola Cucari Eugenio D' Angelo Domenico Sardanelli Francesco Surace Simone Di Silvestre Substance and symbol in ESG-linked executive compensation: evidence from Italian listed companies problems by improving the alignment of executive remuneration with shareholders' objectives (Murphy, 1985). Therefore, several studies state that to obtain this alignment and push executives to raise companies' CSR engagement, the compensation committee should tie managers' remunerations to CSR objectives (Al-Shaer and Zaman, 2019). ...
... There is positive and significant relationship between firm's size and CEO's compensation. Such a finding is consistent with those reported by (Rosen ,1992;Murphy 1985;Zhou ,2000;Ryan &Wiggins, 2001) (from the US market). Since the coefficient of dummy variables is not significant, it can be said that CEO's compensation does not differ in merger and pre merger time. ...
NRB provision to relate executive’s fixed annual compensation with staff salary and total assets of the respective Banks is different from those of other country (Bhatta, 2010). This is the first study to examine the relationship between executive compensation and firm performance in Nepalese banking industry. Data are collected from 21 commercial banks from the study period 2014/15 to 2020/ 21. Panel data are analyzed through pooled OLS and fixed effect model by using three control variables (i.e. Leverage, size and risk). Result showed that executive compensation is not influenced by firms performance in Nepalese commercial banks. Result also revealed that pay performance relationship is not influenced by size of the firms. It is concluded that possible reason for this insignificant relationship is contradict and impractical compensation directives issued by NRB, as claimed by (Bhatta,2010)
... So, the relationship between executive pays and corporate performance has always been a matter of debate [1]. Although a large number of articles have appeared on the correlation between executive compensation and corporate performance, there is still no definitive conclusion on the topic, with some believing that the two are unrelated and others believing that they are related [2][3][4]. This paper analyzes whether there is a correlation between executive compensation and corporate performance of listed companies based on data and, based on the results of the data analysis, makes recommendations for future corporate executive compensation policies. ...
This paper selected a sample of US listed companies and conducted correlation analysis and regression analysis on the relevant data of the sample 2021 with the help of Excel and SPSS statistical software in order to clarify the degree of correlation between executive compensation and corporate performance of listed companies. The findings suggest that the two are not correlated, but the reason for this result may be due to the influence of the irresistible general environmental background and the imperfection of the listed companies' executive compensation policies. In order to improve corporate performance, some suggestions are made so that both companies and executives can achieve a win-win situation.
... To the contrary, Hanson and song (2000) showed that managerial stock ownership can serve as an important internal control mechanism, giving managers economic motivation to work in line with shareholders but later their Hanson and Song (2006) stated as companies that have lower management ownership tend to be more likely to undertake acquisitions and this suggests weaker internal control systems. Murphy (1985) postulated as managers that have higher incentives tend their firms to grow beyond the optimal level. Yermack (1996) focused on board structure reflecting that smaller boards tend to have greater operating profitability and higher likelihood of CEO dismissal after poor firm performance. ...
This paper tests the influence of managerial entrenchment and capital structure decisions using Nepalese firms' data and executives view. A majority of earlier studies show that firm leverage is negatively associated with the degree of entrenchment of managers. This study examines whether or not this is consistent in the context of Nepal. The data were taken from top listed companies on NEPSE, pharmaceuticals companies registered in Department of Drug Administration and other non-listed companies. To achieve the objective of the study, a descriptive and causal comparative research design has been administered. The managerial entrenchment index has been calculated using Principal Component Analysis. The major finding of the study shows that the managerial entrenchment increases as the percentage of CEO ownership rises. There exists positive association of managerial entrenchment and CEO percent ownership which suggests that increase in equity holding by CEO or top executives leads to lower shareholder rights or higher managerial entrenchment.
... When a firm faces significant external control because of the presence of a large external block owner of shares, CEO compensation diminishes (Hambrick & Finkelstein, 1995). Additionally, several studies have cast doubt on the relationship of executive pay and firm performance (Deckop, 1988;Murphy, 1985). In sum, high CEO compensation may indicate weak board oversight and heightened CEO influence over the compensation committee. ...
In this paper, we examine a possible antecedent to board effectiveness – the presence of a nominating committee. We argue that director cooptation by CEOs, and therefore ineffectual governance, may result from allowing CEOs to appoint sympathetic directors. Thus, because outside independent board members are more likely to be effective in their roles as monitors of the CEO, and because such members are more likely to have been selected by nominating committees, measures of board effectiveness should be positively associated with the presence of a nominating committee. Our results are largely consistent with our hypotheses, and are thus instructive in the design of optimal governance mechanisms. We find that firm profitability, frequency of compensation committee meetings, compensation committee size, and CEO experience of compensation committee members are all higher among firms with nominating committees.
Saudi Arabian firms are evolving from government or family-run businesses to larger corporations due to foreign investments. However, the role of a chief executive officer (CEO) is retained by family members. This study investigates the factors responsible for CEO turnover in Saudi Arabia in relationship to firm performance and compares them against those in other countries. This study is the first to look at CEO turnover in the Saudi context. Using panel data from 169 Saudi firms listed between 2007 and 2014, average marginal effects from a binary probit model, and differences-in-differences analysis, the effects of the following independent variables were assessed: CEO age, retirement age, tenure, pay, shareholdings, duality, board size and composition, firm ownership, and firm performance, with CEO turnover as the binary dependent variable. Results indicated that CEO turnover negatively relates to firm performance, irrespective of whether the dismissal is voluntary or forced, reaffirming a negative turnover—performance sensitivity. Further, CEOs with less than 5% shareholding face a greater likelihood of dismissal by the board, whereas larger shareholders are more entrenched. CEOs in government-owned firms show higher performance-related turnover, while those in family or foreign firms show no such relationship.
The aim of this study is to revisit the concept of the separation between ownership and control through reviewing studies on agency theory, governance, and corruption. This study applies integrative literature review as research method where the arguments and counterarguments are derived from existing studies. Relevant literature is identified and read in detail using the selected review strategy. The principal goal of the study is to develop an inventory surrounding the key themes of governance, corruption, and agency theory. None of the existing studies addresses the interrelationships between agency theory, corruption, and corporate governance. This study, thus, fills the gap exploring the theoretical and empirical evidence studying the bibliometric sources. The study finds evidence in support of changing ownership pattern from diffuse to concentrated and argues that the change has caused corruption due to deepening agency crisis. The study also finds that the extant literature focuses on applied areas which calls for further studies on core areas. Incorporating the concept espoused by Berle and Means, this study brings practical implication of agency theory in real life and extends the applicability of the concept.
While there is a wealth of literature on CEO pay and firm performance, there is little literature on pay-for-performance for top management team (TMT) members other than the CEO, and the effects on firm performance. In this paper, the overall effectiveness of pay for performance plans is described. The main strategies implemented by contemporary organizations to increase employee performance are analyzed. The advantages and disadvantages of paying for performance are presented. According to the results, in terms of work where cognitive skills are needed, the disadvantages of this strategy prevail. However, as for work where physical abilities are required, advantages are more. Regarding cognitive skills, certain techniques are presented to make the strategy of paying for performance effective and efficient.
Incentive problems that arose from the classical sharecropping contract of Adam Smith (Smith (1776)) can also importantly arise in modern corporate management in various forms. We briefly review the history of modern contract theory and discuss basic issues in contracting decisions which eventually boil down to tradeoffs between risk/uncertainty sharing and incentives.
This study explores whether the sensitivity of CEO compensation to changes in firm performance depends on the CEO's likelihood of leaving the position. In a sample of 3180 US publicly-traded firms, we find that the sensitivity of bonus pay to firm performance is enhanced for a CEO who has reached retirement age. Further, we find that the sensitivity of bonus pay to firm performance is greater when there is evidence of a planned CEO turnover within a two-year window. We show that these findings are consistent with a principal-agent model in which firms who anticipate a greater likelihood of CEO departure find it advantageous to enhance the link between bonus pay and concurrent performance measures to compensate for the lowering of incentives that rely on the manager being employed long-term. The results provide a rationale for including bonus pay in the overall executive compensation package.
La política retributiva es, sin lugar a dudas, una de las dimensiones que más interés está despertando en el campo de la Dirección y Gestión de Recursos Humanos actuales. En este trabajo, la autora propone un modelo propio de análisis de este factor aplicado a la Alta Dirección. El interés del artículo radica, por tanto, no sólo en el valor que aportan las conclusiones del mismo, sino también en el valor metodológico que tiene el modelo de análisis propuesto.
Purpose
The authors analyze the association between the functional background of the compensation committee chair and CEO compensation. The analysis is motivated by the continuing debate about the reasonableness of executive pay patterns and the growing emphasis on the role of compensation committees.
Design/methodology/approach
The authors define three expert categories—accounting, finance, and generalist—and collect data on the compensation committee (CC) chairs of the S&P 500 firms from 2008 to 2018. The authors run an ordinary least square model and regress CEO total and cash compensation on the three expert categories.
Findings
The authors find that firms in which the CC chair has expertise in accounting, finance, and general business favor performance measures that are more aligned with accounting, finance, and general business, respectively. There is little evidence that CC chairs who are CEOs of other firms endorse more generous pay for the host CEO; the authors find some evidence that CC chairs tenure relative to the host CEO's is negatively associated with the level of the CEO's pay.
Research limitations/implications
This study suggests that firms and regulators should consider the background of the compensation committee chair to understand the variations in top executive.
Practical implications
Companies desiring to link executive compensation to particular areas of strategy must also consider matching the functional background of the compensation committee chair with the target strategy areas. From regulatory standpoint, requiring compensation committees to operate independent of inside directors can reduce attempts by inside directors to skim the process, but a failure to also consider the impact of compensation committees' discretion over the pay-setting process can distort the executives' pay-performance relation.
Originality/value
This is the first study to examine the effects of the functional background of the compensation committee chair on CEO compensation.
Companies continuously make choices about who gets hired and who does not, who gets a raise and who does not, and who gets a promotion and who does not. Those decisions have significant implications for the division of income in society—and consequently for economic inequality. That is why ethical questions about inequality and fairness are important to business ethics. In this chapter, we elaborate, explain, and compare three important ethical principles that can be used to guide decisions about hiring, remuneration, and promotion: the utilitarian, libertarian, and desertist principles.KeywordsJusticeInequalityLibertarian principleDesertist principleUtilitarian principleJust salaries
We consider multiagent multifirm contracting when agents benchmark their wages to those of their peers, using weights that vary within and across firms. When a single principal commits to a public contract, optimal contracts hedge relative wage risk without sacrificing efficiency. But compensation benchmarking undoes performance benchmarking, causing wages to load positively on peer output, and asymmetries in peer effects can be exploited to enhance profits. With multiple principals, a “rat race” emerges: agents are more productive, with effort that can exceed the first best, but higher wages reduce profits and undermine efficiency. Wage transparency and disclosure requirements exacerbate these effects.
The advocates of “doing well by doing good” have advised firms to invest in corporate social responsibility (CSR), but firms may get lost on how to invest their limited resources in it since CSR is a complex concept involving many activities and different types of stakeholders. In this work, we draw upon the perspective of stakeholder saliency and the stakeholder resource‐based view (SRBV) to propose that stakeholders may have different levels of expectations for CSR and contribute to firm value creation differently. Therefore, firms using different CSR to treat different stakeholders (high CSR variability) will have better financial performance. We further propose that context, in particular media coverage and state ownership, moderates the relationship between CSR variability and firm performance, as stakeholders of highly visible firms and state‐owned enterprises (SOEs) may frown upon a discriminate treatment in CSR. Findings based on a sample of 3313 publicly listed firms and 15,324 firm‐year observations in China's stock markets during the 2010–2018 period provide good support for our predictions.
We explore the consequences of limiting executive pay on voluntary executive turnover by exploiting a Chinese government policy restricting executive pay at a subset of firms. Affected firms experience an increase in voluntary executive turnover, with executives increasingly moving to firms not bound by the pay policy. Executives that leave are of higher quality as suggested by their stronger stock and accounting performance in the year prior to the turnover. Affected firms suffer firm value losses, especially when talented executives leave. Our findings demonstrate the importance of compensation contracts in retaining executives and suggest a need for regulatory caution, since mandated constraints aimed at trying to “fix” executive pay can hurt firm value and ultimately, hurt shareholders.
This paper was accepted by Suraj Srinivasan, accounting.
Funding: S. Silveri acknowledges research support in the form of a summer research grant from the Fogelman College of Business and Economics at the University of Memphis. This research support does not imply endorsement of the research results by either Fogelman College or the University of Memphis. K. Wang is grateful for the financial support provided by the Tsinghua University Initiative Scientific Research Program and the research project of the Institute for State-Owned Enterprises, Tsinghua University. L. Zhao is grateful for the financial support provided by the Asia Research Center in Nankai University [Project AS2206].
Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4812 .
“We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society” (Klaus Schwab, 2016).
Overview
This topic is discussed under the following sub-headings:
I. Introduction: Preamble, Concepts of Depreciation and Change in Technology.
ii. Definition of Terms: Artificial and Intelligence, Types of intelligence.
iii. Definitions, Types, History, Fears and Challenges of Artificial Intelligence.
iv. Comparative Analysis of Artificial and Natural Intelligence.
v. Current applications of Artificial Intelligence
vi. Opportunities provided by Artificial Intelligence.
vii. Threats posed by Artificial Intelligence particularly in Sub-Sahara Africa.
viii. Conclusion.
This article investigates the impact of insurance companies’ performance determinants that affect the CEO’s compensations in the emerging market for insurers. The researchers have pooled data for 10 Saudi insurance companies listed on the Saudi stock exchange (TADAWUL) and applied different regression models to assess the relationship between the various CEO compensations packages and insurance companies’ performance. A linear regression model was the better model fitting to explain the data well. The dependent variable is the CEO’s compensations measured by using salaries, allowances and bonuses. Five variables had used as independent variables besides two variables as insurer-specific control variables. We found a significant positive impact between the total earned premiums, the net incomes and CEO compensations. But relationship between investments, assets and revenues and CEO compensations was negative. At the same time there is no relationship between profit per stock, and the insurer’s age and CEO compensations.
Z Bu çalışma Türk bankacılık sektöründe finansal performans ile üst düzey yönetici ücretleri arasındaki ilişkiyi incelemektedir. 2011-2020 dönemine ilişkin hisse senetleri Borsa İstanbul'da işlem gören 12 bankanın verileri panel veri analizi yöntemine tabi tutularak, muhasebe temelli performans gösterge-leri ve piyasa temelli performans göstergelerinin üst düzey yönetici ücretlerini etkileyip etkilemediği araştırılmıştır. Çalışmanın sonuçlarına göre, banka aktif kârlılığı ve sermaye yeterliliği ile üst yöne-time sağlanan faydalar arasında pozitif yönlü bir ilişki bulunmaktadır. Özkaynak kârlılığı, net faiz marjı ve banka sahiplik yapısı ile yöneticilere sağlanan faydalar arasında anlamlı bir ilişkisi tespit edilememiştir. Fiyat/kazanç oranı ile yöneticilere sağlanan faydalar arasında ise negatif yönlü ilişikli olduğu anlaşılmıştır. Anahtar Kelimeler: Üst düzey yöneticilere sağlanan faydalar, Muhasebe temelli finansal performans göstergeleri, Piyasa temelli finansal performans göstergeleri JEL Sınıflandırması: M410
In this paper the financial incentives of executives are analyzed, theoretically and econometrically, with particular emphasis on the relationship between executive motivations and the sales-maximization hypothesis. Executive financial incentives are found to be primarily related to firm stock market performance. The sales performance of the firm has no consistent positive or negative effect on executive financial return. The structures of individual firms' compensation packages were tested for effects on firm performance. It was found that firms with executives whose financial rewards more closely paralleled stockholders' interests performed better in the stock market over the postwar period. For this sample of firms it was concluded that the hypothesis of present-value maximization better explains firm behavior than the hypothesis of sales maximization. It is the conclusion of this author that the sales-maximization hypothesis does not usefully characterize the "typical oligopolist," as has been asserte...
Two kinds of models for a productive organization are presented. In the first, both production and rewards are based on the performance of individuals, which is perfectly observed. Their abilities are not observable. Despite this, theorems are proved giving strong grounds for the equality of wages and marginal products unless there is monopsony in the labor market. This latter case is also discussed. The second model, which focuses on the imperfect observation of performance, allows interesting deductions about optimal payment schedules and organizational structure.
No abstract is available for this paper.
Managers of conglomerates are hypothesized to effect firm-enlarging actions that yield greater remuneration for them but losses for shareholders. This hypothesis is tested by examining the gains and losses to senior managers and shareholders of twenty-nine large conglomerates from 1970 through 1975. The data reveal that the average manager's annual gains and losses from changes in stock returns far exceeded his remuneration. Furthermore, top managers of conglomerates where stock returns decreased left their positions more frequently than did the officers of the other conglomerates. These findings are inconsistent with the self-serving managerial hypothesis as it usually is stated.
This paper investigates the internal managerial control mechanisms at the disposal of a corporation's compensation-setting board or committee. The hypotheses tested are that both compensation changes and management changes are methods used to control top management, and that the use of these control methods is motivated by changes in the firm's stock price performance. Public data from the period 1977–1980 support our hypotheses. We conclude that the firm's board creates managerial incentives consistent with those of the firm's owners, both by setting compensation and following management change policies which benefit shareholders.
This paper analyzes compensation schemes which pay according to an individual's ordinal rank in an organization rather than his output level. When workers are risk neutral, it is shown that wages based upon rank induce the same efficient allocation of resources as an incentive reward scheme based on individual output levels. Under some circumstances, risk-averse workers actually prefer to be paid on the basis of rank. In addition, if workers are heterogeneous inability, low-quality workers attempt to contaminate high-quality firms, resulting in adverse selection. However, if ability is known in advance, a competitive handicapping structure exists which allows all workers to compete efficiently in the same organization.
If options are correctly priced in the market, it should not be possible to make sure profits by creating portfolios of long and short positions in options and their underlying stocks. Using this principle, a theoretical valuation formula for options is derived. Since almost all corporate liabilities can be viewed as combinations of options, the formula and the analysis that led to it are also applicable to corporate liabilities such as common stock, corporate bonds, and warrants. In particular, the formula can be used to derive the discount that should be applied to a corporate bond because of the possibility of default.
Wage trends over the working career are explored in a two-period model assuming that workers have different intrinsic productivities which are manifested stochastically. Firms compete for a limited number of risk averse employees. The basic model, which was developed for the study of academic research employment, postulates that information on prospective productivity is symmetrically available to firm and worker. The "observed" pattern of academic wages is found to emerge: young faculty is underpaid and the less well paid older faculty is overpaid. The model is used to investigate early retirement plans intended to induce the latter group to retire. It is found that such plans can only be economically advantageous if the prorated overhead costs of a faculty member exceed the value of his output. The basic model is then reinterpreted to answer the general question: when and how should a firm discharge employees of low productivity? A contrasting asymmetrical information model is also introduced (employees have more information than employers). In the asymmetrical case, the composition of the labor force is endogenously determined by self-selection of prospective employees. Firing of employees with poor track records can also occur.
This paper analyzes the role of incentives, risk, and information in determining the structure of employment contracts. In particular, we focus on the functions performed by piece rate versus time rate payment systems and by supervisors. The relative reliance on piece rates versus time rates is related to risk sharing, to the use of the payment system as a method of screening employees, and to differential information concerning the difficulties of the tasks being performed. The choice of payment system thus depends on the attitudes toward risk of workers and employers, effort supply elasticities, the sources and magnitude of the uncertainties, and the nature of the supervision used in the employment relation. The supervisor is viewed as monitoring inputs (enforcing contracts), screening individuals, obtaining information about the state of the world, etc. Their roles are related to the nonconvexities associated with information.
The distributions of firm size, span of control, and managerial incomes are modeled as the joint outcome of market assignments of personnel to hierarchical positions. Assigning persons of superior talent to top positions increases productivity by more than the increments of their abilities because greater talent filters through the entire firm by a recursive chain of command technology. These multiplicative effects support enormous rewards for top level management in large organizations. Also, superior managers control more than proportionately larger firms. Consequently, the distributions of reward and firm size are skewed relative to the distribution of abilities.
The role of imperfect information in a principal-agent relationship subject to moral hazard is considered. A necessary and sufficient condition for imperfect information to improve on contracts based on the payoff alone is derived, and a characterization of the optimal use of such information is given.
This paper discusses the question of whether economic time series regression models should be estimated between the levels or the changes of the variables of interest. We argue that many economic models should be estimated between the changes of the variables, rather than the levels of the variables. In addition, comparisons of the levels and changes regressions can be used as a crude test of model specification. These issues are illustrated with examples from Friedman and Meiselman's (1963) study of annual income and consumption and with data on sunspot activity from 1897–1958.
A dynamic, equilibrium model of long term (implicit) labour contracts under incomplete but symmetric information is developed.
Workers are assumed to be risk averse and of unknown ability or productivity. Risk neutral firms learn, as do workers, about
each worker's productivity by observing the worker's output over time. It is shown that equilibrium contracts provide for
wages which never decline with age and increase only when the worker's market value increases above his current wage. In addition
to characterizing the equilibrium wage contract, we also derive some of its implications for the behaviour of aggregate wages
across various groups of workers. These implications explain some findings in the recent empirical literature on age-earnings
profiles. In particular our model can explain why earnings may be positively related to experience even after controlling
for productivity, as some empirical studies have indicated.
Corporate performance and managerial remuneration these aggregate compensation categories-market performance portant determinant of executive compensation Augustine's laws (American Institute of Aeronautics and Astro-nautics
- K J Murphy
K.J. Murphy, Corporate performance and managerial remuneration these aggregate compensation categories-market performance portant determinant of executive compensation. References Augustine, Norman, R., 1982, Augustine's laws (American Institute of Aeronautics and Astro-nautics, New York).
The self-serving management hypothesis: Some evidence The pricing of options and corporate liabilities
- Benston
- J George
Benston, George, J., 1985, The self-serving management hypothesis: Some evidence, Journal of Accounting and Economics, this issue. Black, Fischer and Myron Scholes, 1973, The pricing of options and corporate liabilities, Journal of Political Economy, May/June, 637-654.
Reform executive pay or congress will, The Wall Street Journal
- Drucker
- F Peter
Drucker, Peter F., 1984, Reform executive pay or congress will, The Wall Street Journal, April 24.
Executive compensation in large industrial organizations (NBER and Columbia University Press
- Lewellen
- Wilbur
Lewellen, Wilbur G., 1968, Executive compensation in large industrial organizations (NBER and Columbia University Press, New York).
The ownership income of management (NBER and Columbia University Press
- Lewellen
- G Wilbur
Lewellen, Wilbur G., 1971, The ownership income of management (NBER and Columbia University Press, New York).
Ability, performance, and compensation: A theoretical and empirical investigation of executive labor contracts
- K J Murphy
- Murphy
- J Kevin
K.J. Murphy, Corporate performance and managerial remuneration Murphy, Kevin, J., 1984, Ability, performance, and compensation: A theoretical and empirical investigation of executive labor contracts, Ph.D. dissertation (University of Chicago, Chicago, IL).
Top executive compensation
- Fox
Reform executive pay or congress will
- Drucker
Ability, performance, and compensation: A theoretical and empirical investigation of executive labor contracts
- Murphy