CEO compensation

Carola Frydman; Dirk Jenter

This paper surveys the recent literature on CEO compensation. The rapid rise in CEO pay over the past 30 years has sparked an intense debate about the nature of the pay-setting process. Many view the high level of CEO compensation as the result of powerful managers setting their own pay. Others interpret high pay as the result of optimal contracting in a competitive market for managerial talent. We describe and discuss the empirical evidence on the evolution of CEO pay and on the relationship between pay and firm performance since the 1930s. Our review suggests that both managerial power and competitive market forces are important determinants of CEO pay, but that neither approach is fully consistent with the available evidence. We briefly discuss promising directions for future research. -- executive compensation ; managerial incentives ; incentive compensation ; equity compensation ; option compensation ; corporate governance

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Year of publication:	2010
Authors:	Frydman, Carola ; Jenter, Dirk
Publisher:	München : CESifo
Subject:	Führungskräfte \| Managers \| Vergütungssystem \| Compensation system \| Leistungsanreiz \| Performance incentive \| Macht \| Power \| Wettbewerb \| Competition \| Unternehmenserfolg \| Firm performance

Extent:	Online-Ressource (PDF-Datei: 42 S., 354 KB) graph. Darst.
Series:	CESifo working papers. - München : [Verlag nicht ermittelbar], ISSN 2364-1428, ZDB-ID 2065232-X. - Vol. 3277
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature ; Übersichtsarbeit ; Systematic review
Language:	English
Notes:	Parallel als Druckausg. erschienen
Other identifiers:	hdl:10419/46273 [Handle]
Classification:	D20 - Production and Organizations. General ; G30 - Corporate Finance and Governance. General ; J30 - Wages, Compensation, and Labor Costs. General ; J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; J33 - Compensation Packages; Payment Methods ; J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets ; M52 - Compensation and Compensation Methods and Their Effects (stock options, fringe benefits, incentives, family support programs)
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10008797772