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Manager remuneration, share buybacks, and firm performance

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Listed:
  • Herbert Dawid
  • Philipp Harting
  • Sander van der Hoog

Abstract

Using a dynamic heterogeneous agent industry model, we examine the impact of manager remuneration schemes on firms’ investment decisions and on the evolution of their competitiveness and share values. Whereas an increase in the share-based manager remuneration component is always beneficial to the manager, it is beneficial for shareholders only if such a change in the remuneration scheme is adopted by all firms in the industry. In that case, productivity growth is slowed down and workers’ real wages are reduced.

Suggested Citation

  • Herbert Dawid & Philipp Harting & Sander van der Hoog, 2019. "Manager remuneration, share buybacks, and firm performance," Industrial and Corporate Change, Oxford University Press, vol. 28(3), pages 681-706.
  • Handle: RePEc:oup:indcch:v:28:y:2019:i:3:p:681-706.
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    File URL: http://hdl.handle.net/10.1093/icc/dty073
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    References listed on IDEAS

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    Cited by:

    1. Mattia Guerini & Philipp Harting & Mauro Napoletano, 2020. "Governance structure, technical change and industry competition," Working Papers halshs-03040281, HAL.
    2. Oldham, Matthew, 2020. "Quantifying the concerns of Dimon and Buffett with data and computation," Journal of Economic Dynamics and Control, Elsevier, vol. 113(C).

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    More about this item

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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