| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP11385
|
| DP11385 CEO PAY AND THE RISE OF RELATIVE PERFORMANCE CONTRACTS: A QUESTION OF GOVERNANCE? |
| John Van Reenen; Brian Bell
|
| 发表日期 | 2016-07-13
|
| 出版年 | 2016
|
| 语种 | 英语
|
| 摘要 | Would moving to relative performance contracts improve the alignment between CEO pay and performance? To address this we exploit the large rise in relative performance awards and the share of equity pay in the UK over the last two decades. Using new employer-employee matched datasets we find that the CEO pay-performance relationship remains asymmetric: pay responds more to increases in shareholders’ return performance than to decreases. Further, this asymmetry is stronger when governance appears weak. Second, there is substantial “pay-for-luck” as remuneration increases with random positive shocks, even when the CEO has equity awards that explicitly condition on firm performance relative to peer firms in the same sector. A reason why relative performance pay fails to deal with pay for luck is that CEOs who fail to meet the terms of their past performance awards are able to obtain more generous new equity rewards in the future. Moreover, this “compensation effect” is stronger when the firm has weak corporate governance. These findings suggest that reforms to the formal structure of CEO pay contracts are unlikely to align incentives in the absence of strong shareholder governance. |
| 主题 | Labour Economics
|
| 关键词 | Ceo
Pay
Incentives
Equity plans
|
| URL | https://cepr.org/publications/dp11385
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| 来源智库 | Centre for Economic Policy Research (United Kingdom)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/540202
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推荐引用方式
GB/T 7714 |
John Van Reenen,Brian Bell. DP11385 CEO PAY AND THE RISE OF RELATIVE PERFORMANCE CONTRACTS: A QUESTION OF GOVERNANCE?. 2016.
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