Executive Compensation and Agency Effects
AbstractThe separation of ownership from control in large corporations can cause agency problems. This study analyzes the effects of the dispersion of corporate ownership on the compensation of the top executives of Fortune 500 companies. The effects are estimated across the executive hierarchy and for different components of the compensation package in contrast to more limited previous studies. The results indicate that there is a significant agency effect on executive pay, though the magnitude is small relative to company size. The effects are greatest for the most liquid form of remuneration, salaries, and are nonuniform across executive categories, with the strongest effect found for the Chairman of the Board. Copyright 1995 by MIT Press.
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Bibliographic InfoArticle provided by Eastern Finance Association in its journal The Financial Review.
Volume (Year): 30 (1995)
Issue (Month): 2 (May)
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- Elston, Julie Ann & Goldberg, Lawrence G., 2003. "Executive compensation and agency costs in Germany," Journal of Banking & Finance, Elsevier, vol. 27(7), pages 1391-1410, July.
- Engesaeth, E.J.P., 2011. "Managerial compensation contracting," Open Access publications from Tilburg University urn:nbn:nl:ui:12-4807459, Tilburg University.
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- Grund, Christian & Walter, Tanja, 2013. "Management Compensation and the Economic Crisis: Longitudinal Evidence from the German Chemical Sector," IZA Discussion Papers 7435, Institute for the Study of Labor (IZA).
- Thanida Chitnomrath & Robert Evans & Theo Christopher, 2011. "Corporate governance and post-bankruptcy reorganisation performance: Evidence from Thailand," Asian Review of Accounting, Emerald Group Publishing, vol. 19(1), pages 50-67, May.
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