Restricting CEO Pay

Dittmann, Ingolf ; Maug, Ernst ; Zhang, Dan

DOI:	https://doi.org/10.1016/j.jcorpfin.2011.04.007
URL:	https://www.researchgate.net/publication/227352795...
Weitere URL:	http://www.sciencedirect.com/science/article/pii/S...
Dokumenttyp:	Zeitschriftenartikel
Erscheinungsjahr:	2011
Titel einer Zeitschrift oder einer Reihe:	Journal of Corporate Finance
Band/Volume:	17
Heft/Issue:	4
Seitenbereich:	1200-1220
Ort der Veröffentlichung:	Amsterdam
Verlag:	Elsevier
ISSN:	0929-1199
Verwandte URLs:	https://ssrn.com/abstract=1660490
Sprache der Veröffentlichung:	Englisch
Einrichtung:	Fakultät für Betriebswirtschaftslehre > ABWL u. Corporate Finance (Maug 2006-)
Fachgebiet:	330 Wirtschaft
Abstract:	We analyze several proposals to restrict CEO compensation and calibrate two models of executive compensation that describe how firms would react to different types of restrictions. We find that many restrictions would have unintended consequences. Restrictions on total realized (ex-post) payouts lead to higher average compensation, higher rewards for mediocre performance, lower risk-taking incentives, and the fact that some CEOs would be better off with a restriction than without it. Restrictions on total ex-ante pay lead to a reduction in the firm's demand for CEO talent and effort. Restrictions on particular pay components, and especially on cash payouts, can be easily circumvented. While restrictions on option pay lead to lower risk-taking incentives, restrictions on incentive pay (stock and options) result in higher risk-taking incentives.
Zusätzliche Informationen:	Auch als ECGI - Finance Working Paper No. 291/2010, s. "Verwandte URLs"