In 1991, defense contractor General Dynamics engaged a new management team which adopted an explicit corporate objective of creating shareholder value. The company tied executive compensation to shareholder wealth creation, and subsequently implemented a strategy that included downsizing,...

Ittner, Lambert, and Larcker (J. Accounting Economics (2003)) present compelling evidence that new economy firms rely more on stock-based compensation than do old economy firms, based on 1998 and 1999 data from a proprietary sample of companies. I complement the ILL results by analyzing data...

We assert that decision rights in organizations are not contractible: the boss can always overturn a subordinate's decision, so formal authority resides only at the top. Although decision rights cannot be formally delegated, they might be informally delegated through self-enforcing relational...

Executive compensation consultants face potential conflicts of interest that can lead to higher recommended levels of CEO pay, including the desires to ldquo;cross-sellrdquo; services and to secure ldquo;repeat business.rdquo; We find evidence in both the US and Canada that CEO pay is higher in...

This paper challenges the widely accepted stylized fact that CEOs in the United States are paid significantly more than their foreign counterparts. Using CEO pay data across 14 countries with mandated pay disclosures, we show that the US pay premium is economically modest and primarily reflects...

This paper challenges the widely accepted stylized fact that CEOs in the United States are paid significantly more than their foreign counterparts. Using CEO pay data across 14 countries with mandated pay disclosures, we show that the US pay premium is economically modest and primarily reflects...