Although stock return-based performance metrics are common in CEO compensation contracts in the US, similar CEO pay arrangements may not be appropriate in India given higher stock return volatility and lower liquidity. Instead, sales growth as a performance metric could be useful in...

The objective of CEO compensation is to better align CEO-shareholder interests by inducing CEOs to make more optimal (albeit risky) investment decisions. However, recent research suggests that these incentives have a significant down-side(i.e., they motivate executives to manipulate reported...