IDEAS home Printed from https://ideas.repec.org/p/pri/indrel/153.html

Agency Delayed Compensation, and the Structure of Executive Remuneration

Author

Listed:
  • Jonathan Eaton

    (Yale University)

  • Harvey S. Rosen

    (Princeton University)

Abstract

In this paper we examine the factors affecting the structure of executives' compensation packages. We focus particularly on the role of various types of delayed compensation as means of "bonding" executives to their firms. The basic problem is to design a compensation package that rewards actions that are in the 1ong-run interest of the stockholders. Firms must take into account (1) their ability to discern unfortunate circumstances from mismanagement; (2) the extent to which a compensation package forces the executive to face risks beyond his control; and (3) the willingness of a given executive to bear this risk. we use our theory to interpret some executive compensation data from the early 1970's.

Suggested Citation

  • Jonathan Eaton & Harvey S. Rosen, 1982. "Agency Delayed Compensation, and the Structure of Executive Remuneration," Working Papers 533, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:153
    as

    Download full text from publisher

    File URL: https://dataspace.princeton.edu/bitstream/88435/dsp012f75r801f/1/153.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pri:indrel:153. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bobray Bordelon (email available below). General contact details of provider: https://edirc.repec.org/data/irprius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.