Non-Performance Pay and Relational Contracting: Evidence from CEO Compensation

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Standard

Non-Performance Pay and Relational Contracting: Evidence from CEO Compensation. / DeVaro, Jed; Kim, Jin-Hyuk; Vikander, Nick.

I: Economic Journal, Bind 128, Nr. 613, 2018, s. 1923-1951.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

DeVaro, J, Kim, J-H & Vikander, N 2018, 'Non-Performance Pay and Relational Contracting: Evidence from CEO Compensation', Economic Journal, bind 128, nr. 613, s. 1923-1951. https://doi.org/10.1111/ecoj.12471

APA

DeVaro, J., Kim, J-H., & Vikander, N. (2018). Non-Performance Pay and Relational Contracting: Evidence from CEO Compensation. Economic Journal, 128(613), 1923-1951. https://doi.org/10.1111/ecoj.12471

Vancouver

DeVaro J, Kim J-H, Vikander N. Non-Performance Pay and Relational Contracting: Evidence from CEO Compensation. Economic Journal. 2018;128(613):1923-1951. https://doi.org/10.1111/ecoj.12471

Author

DeVaro, Jed ; Kim, Jin-Hyuk ; Vikander, Nick. / Non-Performance Pay and Relational Contracting: Evidence from CEO Compensation. I: Economic Journal. 2018 ; Bind 128, Nr. 613. s. 1923-1951.

Bibtex

@article{66b073276220409bade1592f5189f919,
title = "Non-Performance Pay and Relational Contracting: Evidence from CEO Compensation",
abstract = "CEOs are routinely compensated for aspects of firm performance that are beyond their control. This is puzzling from an agency perspective, which assumes performance pay should be efficient. Working within an agency framework, we provide a rational for this seemingly inefficient feature of CEO compensation by invoking the idea of informal agreements, specifically the theory of relational contracting. We derive observable implications to distinguish relational from formal contracting and, using ExecuComp data, find that CEOs' annual cash and equity incentive payments positively correlate with the cyclical component of sales and respond to measures of persistence as relational contracting theory predicts.",
keywords = "Faculty of Social Sciences, relational contracts, CEO compensation, pay‐for‐luck, skimming view",
author = "Jed DeVaro and Jin-Hyuk Kim and Nick Vikander",
year = "2018",
doi = "10.1111/ecoj.12471",
language = "English",
volume = "128",
pages = "1923--1951",
journal = "The Economic Journal",
issn = "0013-0133",
publisher = "Wiley",
number = "613",

}

RIS

TY - JOUR

T1 - Non-Performance Pay and Relational Contracting: Evidence from CEO Compensation

AU - DeVaro, Jed

AU - Kim, Jin-Hyuk

AU - Vikander, Nick

PY - 2018

Y1 - 2018

N2 - CEOs are routinely compensated for aspects of firm performance that are beyond their control. This is puzzling from an agency perspective, which assumes performance pay should be efficient. Working within an agency framework, we provide a rational for this seemingly inefficient feature of CEO compensation by invoking the idea of informal agreements, specifically the theory of relational contracting. We derive observable implications to distinguish relational from formal contracting and, using ExecuComp data, find that CEOs' annual cash and equity incentive payments positively correlate with the cyclical component of sales and respond to measures of persistence as relational contracting theory predicts.

AB - CEOs are routinely compensated for aspects of firm performance that are beyond their control. This is puzzling from an agency perspective, which assumes performance pay should be efficient. Working within an agency framework, we provide a rational for this seemingly inefficient feature of CEO compensation by invoking the idea of informal agreements, specifically the theory of relational contracting. We derive observable implications to distinguish relational from formal contracting and, using ExecuComp data, find that CEOs' annual cash and equity incentive payments positively correlate with the cyclical component of sales and respond to measures of persistence as relational contracting theory predicts.

KW - Faculty of Social Sciences

KW - relational contracts

KW - CEO compensation

KW - pay‐for‐luck

KW - skimming view

U2 - 10.1111/ecoj.12471

DO - 10.1111/ecoj.12471

M3 - Journal article

VL - 128

SP - 1923

EP - 1951

JO - The Economic Journal

JF - The Economic Journal

SN - 0013-0133

IS - 613

ER -

ID: 222750625