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Managerial compensation

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Author Info

  • Goergen, Marc
  • Renneboog, Luc

Abstract

We review the existing literature on managerial compensation, with particular reference to the two contrasting views about its main driver. On the one hand, managerial compensation is seen to be the result of a market-based mechanism which ensures that managers have adequate incentives to maximize shareholder value. On the other hand, it is regarded to be a means whereby self-serving executives skim corporate profits and expropriate shareholders. We find that most of the existing literature supports the latter view as executives tend to benefit from windfall earnings and are able to extract rents in the presence of weak corporate governance.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Corporate Finance.

Volume (Year): 17 (2011)
Issue (Month): 4 (September)
Pages: 1068-1077

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Handle: RePEc:eee:corfin:v:17:y:2011:i:4:p:1068-1077

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Web page: http://www.elsevier.com/locate/jcorpfin

Related research

Keywords: Managerial compensation Corporate governance Managerial incentives Principal-agent problem;

References

References listed on IDEAS
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Cited by:
  1. Patrick Kampkoetter, 2012. "Determinants of Compensation in the Financial Services Industry," Cologne Graduate School Working Paper Series 03-12, Cologne Graduate School in Management, Economics and Social Sciences.

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