CEO compensation, change, and corporate strategy

Detalhes bibliográficos
Autor(a) principal: Dow, James
Data de Publicação: 2005
Outros Autores: Raposo, Clara C.
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.5/24376
Resumo: CEO compensation can influence the kinds of strategies that firms adopt. We argue that performance-related compensation creates an incentive to look for overly ambitious, hard to implement strategies. At a cost, shareholders can curb this tendency by precommitting to a regime of CEO overcompensation in highly changeable environments. Alternatively shareholders can commit to low CEO pay, although this requires a commitment mechanism (either by the board of the individual company, or by the society as a whole) to counter the incentive to renegotiate upwards. We study the conditions under which the different policies for CEO compensation are preferred by shareholders.
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spelling CEO compensation, change, and corporate strategyCEO CompensationImplement StrategiesCorporate StrategyCEO compensation can influence the kinds of strategies that firms adopt. We argue that performance-related compensation creates an incentive to look for overly ambitious, hard to implement strategies. At a cost, shareholders can curb this tendency by precommitting to a regime of CEO overcompensation in highly changeable environments. Alternatively shareholders can commit to low CEO pay, although this requires a commitment mechanism (either by the board of the individual company, or by the society as a whole) to counter the incentive to renegotiate upwards. We study the conditions under which the different policies for CEO compensation are preferred by shareholders.The Journal of FinanceRepositório da Universidade de LisboaDow, JamesRaposo, Clara C.2022-05-25T14:13:54Z20052005-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/24376engDow, James and Clara C. Raposo. (2005). "CEO compensation, change, and corporate strategy." The Journal of Finance, Vol. LX, number 6: pp. 2701-2727.info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-06T14:54:02Zoai:www.repository.utl.pt:10400.5/24376Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:08:26.479289Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv CEO compensation, change, and corporate strategy
title CEO compensation, change, and corporate strategy
spellingShingle CEO compensation, change, and corporate strategy
Dow, James
CEO Compensation
Implement Strategies
Corporate Strategy
title_short CEO compensation, change, and corporate strategy
title_full CEO compensation, change, and corporate strategy
title_fullStr CEO compensation, change, and corporate strategy
title_full_unstemmed CEO compensation, change, and corporate strategy
title_sort CEO compensation, change, and corporate strategy
author Dow, James
author_facet Dow, James
Raposo, Clara C.
author_role author
author2 Raposo, Clara C.
author2_role author
dc.contributor.none.fl_str_mv Repositório da Universidade de Lisboa
dc.contributor.author.fl_str_mv Dow, James
Raposo, Clara C.
dc.subject.por.fl_str_mv CEO Compensation
Implement Strategies
Corporate Strategy
topic CEO Compensation
Implement Strategies
Corporate Strategy
description CEO compensation can influence the kinds of strategies that firms adopt. We argue that performance-related compensation creates an incentive to look for overly ambitious, hard to implement strategies. At a cost, shareholders can curb this tendency by precommitting to a regime of CEO overcompensation in highly changeable environments. Alternatively shareholders can commit to low CEO pay, although this requires a commitment mechanism (either by the board of the individual company, or by the society as a whole) to counter the incentive to renegotiate upwards. We study the conditions under which the different policies for CEO compensation are preferred by shareholders.
publishDate 2005
dc.date.none.fl_str_mv 2005
2005-01-01T00:00:00Z
2022-05-25T14:13:54Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.5/24376
url http://hdl.handle.net/10400.5/24376
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Dow, James and Clara C. Raposo. (2005). "CEO compensation, change, and corporate strategy." The Journal of Finance, Vol. LX, number 6: pp. 2701-2727.
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv The Journal of Finance
publisher.none.fl_str_mv The Journal of Finance
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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instacron:RCAAP
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institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
repository.mail.fl_str_mv
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