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Managerial Control and Executive Compensation

Author

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  • Scherer, F.M.

    (Harvard Kennedy School)

Abstract

This article analyzes the trajectory and causes of the explosion of American corporate CEOs' compensation relative to that of average workers between 1958 and 2017. The historical data are presented and analyzed in more detail for 2016 and 2017. Important biases in alternative data sets are explored. Alternative hypotheses for the dramatic changes over time are proposed but not resolved. Among other things, the paper investigates the role of tax and other government policy changes and regulation-induced innovations in the organization of executive pay determination.

Suggested Citation

  • Scherer, F.M., 2019. "Managerial Control and Executive Compensation," Working Paper Series rwp19-002, Harvard University, John F. Kennedy School of Government.
    • Handle: RePEc:ecl:harjfk:rwp19-002
    as

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    File URL: https://research.hks.harvard.edu/publications/getFile.aspx?Id=1731
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    References listed on IDEAS

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    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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    6. Brian J. Hall & Kevin J. Murphy, 2003. "The Trouble with Stock Options," NBER Working Papers 9784, National Bureau of Economic Research, Inc.
    7. Brian K. Boyd, 1994. "Board control and ceo compensation," Strategic Management Journal, Wiley Blackwell, vol. 15(5), pages 335-344, June.
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    Cited by:

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    2. Victor J. Tremblay & Mo Xiao, 2020. "Introduction: Firms with Behavioral Biases," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(2), pages 199-202, March.

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