Management Fashion Pay-for-Performance for CEOs
Abstract
We show theoretically and empirically that Pay-for-Performance, like many manage-ment fashions, has not achieved its intended aim. Our research focuses on previous empirical studies that examine the relation between variable executive pay and firm performance on various different dates. Our results indicate that a variable ceo income contributes very little to the increase of the firm’s performance, and that ceo salary and firm performance are not linked. The example of Pay-for-Performance shows that in the long run, many management fashions do not solve the problems that they promise to solve.Download Info
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Article provided by LMU Munich School of Management in its journal Schmalenbach Business Review.
Volume (Year): 61 (2009)
Issue (Month): 2 (April)
Pages: 119-149
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Related research
Keywords: CEO compensation; Corporate Governance; Crowding Out; Management Fashion; Pay-for-Performance;Find related papers by JEL classification:
- G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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