COMPENSATION CONTRACTS OF CHIEF EXECUTIVE OFFICERS - DETERMINANTS OF PAY-PERFORMANCE SENSITIVITY

Authors
LIPPERT RL MOORE WT
Citation
Rl. Lippert et Wt. Moore, COMPENSATION CONTRACTS OF CHIEF EXECUTIVE OFFICERS - DETERMINANTS OF PAY-PERFORMANCE SENSITIVITY, The Journal of financial research, 17(3), 1994, pp. 321-332
Citations number
31
Categorie Soggetti
Business Finance
Journal title
The Journal of financial research → ACNP
ISSN journal
02702592
Volume
17
Issue
3
Year of publication
1994
Pages
321 - 332
Database
ISI
SICI code
0270-2592(1994)17:3<321:CCOCEO>2.0.ZU;2-5
Abstract
Compensation contracts of chief executive officers of large firms typi cally provide for a low linkage between compensation and stock perform ance. We test predictions of various theoretical models of managerial behavior using pay-performance sensitivity measures. We find that even though the sensitivity measures are low on average, they vary cross-s ectionally, in a manner broadly consistent with predictions from the l iterature on efficient contracting.