This paper provides evidence on how executive compensation relates to firm performance in listed firms in China. Using comprehensive financial and accounting data on China's listed firms from 1998 to 2002, augmented by unique data on executive compensation and ownership structure, we find for...

This paper provides the first rigorous econometric estimates on the pay-performance relations for executives of Korean firms with and without Chaebol affiliation. To do so, we have assembled for the first time panel data (that provide information not only on executive compensation and firm...

We examine the effect of the social connectedness of independent, non-co-opted directors on their ability to monitor and advise the firm. We begin by providing evidence that well-connected directors have greater protection from career concerns. We next examine the channels by which director...

In recent years, the number of female Chief Executive Officers (CEO's) at large firm's has increased to the point that it is possible to statistically compare the performance and management characteristics of firms managed by CEO's of different genders. This paper is an exploratory study that...

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...

This study examines the effect of relative performance evaluation (RPE) on firm performance and risk-taking behavior. Agency theory suggests that RPE use in executive compensation plans improves risk sharing and strengthens incentive alignment when firm performance is exposed to common shocks. I...

Many argue that the design of compensation contracts for public company chief executive officers (CEOs) is often not guided by a goal of value maximization. Yet, there is limited direct empirical evidence on the negative consequences of the proposed inefficient contracting between shareholders...

This paper explores five interpretations of “pay for performance”, presents a practical way to measure pay for performance and shows the extent of pay for performance at S&P 1500 companies. The paper argues that pay for performance has three dimensions: the sensitivity of relative pay to...

This paper uses historical data on relative pay and relative performance to quantify three dimensions of pay for performance: pay leverage (a measure of incentive strength), pay alignment (a measure of correlation) and the pay premium at peer group average performance (a measure of performance...

Building on prior research that postulates a positive relationship between firms’ cash flow and innovation output, we examine whether the use of cashflow performance metrics in CEOs’ compensation contracts has a positive effect on firms’ innovation output. We hypothesize and find that...