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Executive Discretion and Corporate Performance as Determinants of CEO Compensation, Contingent on External Monitoring Activities

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  • Peter Wright
  • Mark Kroll

Abstract

In this paper we discuss the potential impactof managerial discretion and firm performanceon CEO compensation, contingent on the extentof monitoring activities. We argue that CEOcompensation may be positively related toexecutive discretion and corporate performancefor firms that have vigilant external monitors. We alternatively contend that CEO compensationmay neither be associated with discretion norperformance for firms with passive externalmonitors. The empirical results are supportiveof our contentions. Copyright Kluwer Academic Publishers 2002

Suggested Citation

  • Peter Wright & Mark Kroll, 2002. "Executive Discretion and Corporate Performance as Determinants of CEO Compensation, Contingent on External Monitoring Activities," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 6(3), pages 189-214, September.
    • Handle: RePEc:kap:jmgtgv:v:6:y:2002:i:3:p:189-214
    DOI: 10.1023/A:1019676314682
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