Title: Performance Pay and Top-Management Incentives
Abstract:Our estimates of the pay-performance relation (including pay, options, stockholdings, and dismissal) for chief executive officers indicate that CEO wealth changes $3.25 for every $1,000 change in shar...Our estimates of the pay-performance relation (including pay, options, stockholdings, and dismissal) for chief executive officers indicate that CEO wealth changes $3.25 for every $1,000 change in shareholder wealth. Although the incentives generated by stock ownership are large relative to pay and dismissal incentives, most CEOs hold trivial fractions of their firm's stock, and ownership levels have declined over the past 50 years. We hypothesize that public and private political forces impose constraints that reduce the pay-performance sensitivity. Declines in both the pay-performance relation and the level of CEO pay since the 1930s are consistent with this hypothesis.Read More
Publication Year: 1990
Publication Date: 1990-04-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 4798
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot