Other People’s Money: Effects Of Ownership On Compensation Strategy And Executive Pay
- Topics:
- Compensation Guide
- Tags:
- Benefits,
- Compensation,
- Cornell University,
- Equity,
- Finance,
- Financial Services,
- Human Resources,
- Investment
- Source:
- Cornell University
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Overview: This paper develops and tests hypotheses based on agency theory and managerial capitalism to address the question of whether firms' compensation strategies are designed to motivate actions in the interests of equity holders or those of management. It examines differences in the organizational incentive structure of lower-level executives in management-controlled, owner controlled, and owner-managed firms. It is also able to demonstrate that equity holders pay substantial agency costs in management-controlled firms compared with owner-controlled firms. The article ends with discussion of the organizational context for rationalizing executive compensation and the role of compensation consultants.
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Format: PDF | Size: 155KB | Date: Jan 2003 | Pages: 33
