We investigate the determinants of executive pay in a sample of Italian firms. To the best of our knowledge this is the first study on the compensation of Italian executives. We estimate that an increase of real profits per firm by 1 billion lire increases the pay of top executives by only 504...

This study investigates how the mandatory adoption of International Financial Reporting Standards (IFRS) affects the contractual benefits of using accounting information to determine executive compensation in China. After controlling for firm and corporate governance characteristics, we find...

In recent years, a large academic debate has tried to explain the rapid rise in CEO pay experienced over the past three decades. In this article, I review the main proposed theories, which span views of compensation as the result of a competitive labor market for executives to theories based on...

The rise in the level of executive compensation in international banking in the last two decades has been striking. At the same time, corporate declarations of relative performance evaluation (RPE) have enjoyed widespread popularity. RPE determines the level of CEO pay by accounting for common...

This paper investigates whether and how social-psychological mechanisms, namely reciprocity, demographic similarity, and similar experiences, affect CEO compensation packages with respect to the levels of total, fixed, and short- and mid-term compensation and the variable proportion of the...

Understanding executive compensation and its effects helps design better organizations. Research on this area is thus of paramount importance. For large US companies, the ExecuComp database offers access to standardized and comprehensive executive compensation data. Hence, research on executive...

In this paper we describe the important features of executive compensation in the US from 1993 to 2006. Some confirm what has been found for earlier periods and some are novel. Notable facts are that: the compensation distribution is highly skewed; each year, a sizeable fraction of chief...

We study changes in the design of CEO contracts when firms transition from being public with dispersed ownership to being private with strong principals in the form of private equity sponsors. These principals redesign many, but far from all, contract features. There is no evidence that they...

This paper shows that portfolio constraints have important implications for management compensation and performance evaluation. Concretely, in the presence of portfolio constraints, allowing for benchmarking can be beneficial. Benchmark design arises as an alternative effort inducement mechanism...

Using data on executive compensation for the German chemical industry, we investigate the relevance of two theoretical approaches that focus on bonuses as part of a long term wage policy of a firm. The first approach argues that explicit bonuses serve as substitutes for implicit career concerns....