A few bad apples: An analysis of CEO performance pay and firm productivity

被引：18
作者：
Bulan, Laarni [1 ,2 ]
Sanyal, Paroma [1 ,2 ]
Yan, Zhipeng [3 ]
机构：
[1] Brandeis Univ, Int Business Sch, 415 South St, Waltham, MA 02454 USA
[2] Brandeis Univ, Dept Econ, Waltham, MA 02454 USA
[3] Univ Hts, Sch Management, New Jersey Inst Technol, Newark, NJ 07102 USA
来源：
JOURNAL OF ECONOMICS AND BUSINESS | 2010年 / 62卷 / 04期
关键词：
CEO; Executive compensation; Pay-for-performance sensitivity; Productivity;
D O I：
10.1016/j.jeconbus.2010.02.001
中图分类号：
F8 [财政、金融];
学科分类号：
0202 ;
摘要：
We investigate the relationship between CEO performance pay incentives and firm productivity. In general, we find an inverse U-shaped relationship between productivity and the sensitivity of CEO wealth to share value (delta) and a positive relationship between productivity and the sensitivity of CEO option wealth to stock return volatility (vega). Thus, a high delta associated with CEO risk-aversion lowers productivity, but a high vega from stock options offsets this effect. In looking at delta and vega jointly, we also find that options do not always achieve their intended purpose. These results are stronger among firms that are weakly governed or when high transaction costs prevent the writing of an optimal compensation contract. (C) 2010 Elsevier Inc. All rights reserved.
引用
收藏
页码：273 / 306
页数：34
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