CORPORATE-CONTROL, CRIME, AND COMPENSATION - AN EMPIRICAL-EXAMINATIONOF LARGE CORPORATIONS

This study investigates whether the agency cost of corporate crime lea ding to executive pay is greater when monitoring and incentive alignme nt activities by principals is low. The results indicate that executiv e compensation is positively associated with the incidence of corporat e crime in manager controlled firms but not in owner controlled firms. Implications for the monitoring of business activities in owner and m anager controlled firms are developed.