Does Performance-Based Managerial Compensation Affect Corporate Performance

Dados Bibliográficos

ID3210871
AutoresJohn M Abowd (0000-0002-0998-4531, autor correspondente)
Ano1990
Volume43
Fascículo3
Páginas52-S-73-S
Data de publicação1990-04-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoIndustrial and Labor Relations Review (JOURNAL)
Identificadores do periódicoISSN: 0019-7939 • E-ISSN: 2162-271X
EditoraSAGE Publications Inc (PUBLISHER)
DOI10.1177/001979399004300304
OpenAlexW1972018654
ISBN9793990043003
IdiomaEN
Citações recebidas17
Referências citadas31

The author, using 1981–86 data on more than 16,000 managers at 250 large corporations, investigates whether the sensitivity of managerial compensation to corporate performance in one year is positively related to corporate performance in the next year. Accounting-based measures of performance yield only weak evidence of such an association, but economic and market measures yield stronger evidence. Payment of an incremental 10% bonus for good economic performance is associated with a 30 to 90 basis point increase in the expected after-tax gross economic return in the following fiscal year; and payment of an incremental raise of 10% following a good stock market performance is associated with a 400 to 1200 basis point increase in expected total shareholder return

Actuarial science · Affect (linguistics) · Basis point · Bond · Business · Compensation (psychology) · Corporate governance · Economics · Executive compensation · Fiscal year · Monetary economics · Payment · Point (geometry) · Shareholder · Yield (engineering) · Accounting · Accounting and Organizational Management · Auditing, Earnings Management, Governance · Communication · Corporate Finance and Governance · Corporate Taxation and Avoidance · Finance · Psychology · Risk Management in Financial Firms · Social Psychology