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Product market peers and relative performance evaluation
Jayaraman, Sudarshan; Milbourn, Todd; Peters, Florian; … - 2017
We investigate the role of Relative Performance Evaluation (RPE) theory in CEO pay and turnover using a product similarity-based definition of peers (Hoberg and Phillips 2016). RPE predicts that firms filter out common shocks (i.e., those affecting the firm and its peers) while evaluating CEO...
Persistent link: https://www.econbiz.de/10011807920
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Non-mandatory say on pay votes and AGM participation : evidence from Germany
Powell, Daniel; Rapp, Marc Steffen - 2015 - Preliminary Version as of 1 June 2015
Since August 2009, German legislation allows for voluntary Say on Pay Votes (SoPV) during Annual General Meetings (AGMs). We examine 1,169 AGMs of all German listed firms with more than 10,000 agenda items over the period 2010-2013 to identify (1) determinants and approval rates of voluntary...
Persistent link: https://www.econbiz.de/10010530578
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Repricing of Executive Stock Options
Yang, Jerry T. - 2014
We examine the ex-ante optimality of repricing of executive stock options while considering the tax effects of new accounting rules associated with traditional repricing. Although there has been a body of empirical literature on repricing, the optimality of repricing after considering the...
Persistent link: https://www.econbiz.de/10013052235
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Testing for distortions in performance measures : an application to residual income based measures like economic value added
Sloof, Randolph; Praag, Mirjam van - 2014
Distorted performance measures in compensation contracts elicit suboptimal behavioral responses that may even prove to be dysfunctional (gaming). This paper applies the empirical test developed by Courty and Marschke (2008) to detect whether the widely used class of Residual Income based...
Persistent link: https://www.econbiz.de/10010350010
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The Choice of Different Types of Subjectivity in CEO Annual Bonus Contracts
Hoppe, Felix - 2011
In assessing the performance of the CEO, subjectivity by the board of directors is often present in one form or another. We specifically focus on: (1) the ex ante option to ex post override a formula-based contract (“discretionary bonus”), and (2) the ex ante absence of any formula in a...
Persistent link: https://www.econbiz.de/10013123718
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Tax Incentives for Inefficient Executive Pay and Reward for Luck
Göx, Robert F. - 2009
I study the economic consequences of tax deductibility limits on salaries for the design of incentive contracts. The analysis is based on an agency model in which the firm's cash flow is a function of the agent's effort and an observable random factor beyond the agent's control. According to my...
Persistent link: https://www.econbiz.de/10013160258
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On the Relation between Managerial Power and CEO Pay
Göx, Robert F. - 2020
study yields unexpected results. First, powerful managers receive higher pay and a contract with a higher pay … are both increasing in the friendliness of the board. Second, we show that friendly boards provide managers with higher … show that powerful managers underinvest in capital but have less incentives to manage earnings …
Persistent link: https://www.econbiz.de/10012842830
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Estimating the sensitivity of CEO pay to accounting-based performance : gross versus net measures
Black, Dirk E.; Dikolli, Shane S.; Hofmann, Christian; … - 2021
In the empirical estimation of the relation between CEO pay and both firm and peer performance, researchers typically include conventional accounting-based measures that reflect firm performance net of executive pay expense. We analytically show that when firms evaluate CEO performance relative...
Persistent link: https://www.econbiz.de/10013218451
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Internal versus external earnings per share goals and CEO incentives
Armstrong, Christopher; Chau, Jacky; Ittner, Christopher D. - 2017
We examine differences in CEO achievement of EPS goals set separately through analyst forecasts and firm bonus plans. Having different goals for the same performance metric enables us to assess their relative importance in incentivizing CEOs. We find CEOs frequently achieve analyst forecasts,...
Persistent link: https://www.econbiz.de/10011800636
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Testing for Distortions in Performance Measures : An Application to Residual Income Based Measures Like EVA
Sloof, Randolph; van Praag, Mirjam - 2014
Distorted performance measures in compensation contracts elicit suboptimal behavioral responses that may even prove to be dysfunctional (gaming). This paper applies the empirical test developed by Courty and Marschke (2008) to detect whether the widely used class of Residual Income based...
Persistent link: https://www.econbiz.de/10014140893