The DOI matches its Crossref record; 6 of the 6 references it cites were found in a registry or an index.
The Influence of CEO Power on Compensation Contract Design
Open accessAbstract
We investigate whether CEO power influences a firm's decision to change its compensation system in response to regulatory and public pressure. In particular, we assess whether CEO power influences the choice of performance measures as a form of camouflage to minimize the impact of these reforms on their wealth. We examine one component of CEO pay, namely, the use of performance-vested stock option (PVSO) plans, and find that firms with powerful CEOs attach less challenging targets in the initial PVSOs granted to their CEOs. Such firms also appear to adopt PVSO plans early, and are more likely to do so when faced with public outrage over executive compensation. Our results suggest that powerful CEOs attempt to appease public outrage by quickly adopting PVSOs, but that adopting PVSOs early does not appear to be an optimal strategy for increasing shareholder value. Regulators intended that implementation of PVSOs would be beneficial to shareholders by improving the link between CEO pay and firm performance. However, our results indicate that powerful CEOs can negate some of the beneficial effect of PVSOs through their influence on adoption and choice of performance targets. Data Availability: All data used in this study are publicly available from the sources indicated in the paper.
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Cites
A Survey of Corporate Governance
Shleifer, A., & Vishny, R. W. (1997) · The Journal of Finance · doi:10.1111/j.1540-6261.1997.tb04820.x · Cited by 16,243
Building a practically useful theory of goal setting and task motivation: A 35-year odyssey.
Locke, E. A., & Latham, G. P. (2002) · American Psychologist · doi:10.1037/0003-066x.57.9.705 · Cited by 7,766
Corporate Governance and Equity Prices
Gompers, P., Ishii, J., & Metrick, A. (2003) · The Quarterly Journal of Economics · doi:10.1162/00335530360535162 · Cited by 6,120
The Provision of Incentives in Firms
Prendergast, C. (1999) · Journal of Economic Literature · doi:10.1257/jel.37.1.7 · Cited by 3,338
Psychological Aspects of Natural Language Use: Our Words, Our Selves
Pennebaker, J. W., Mehl, M. R., & Niederhoffer, K. G. (2003) · Annual Review of Psychology · doi:10.1146/annurev.psych.54.101601.145041 · Cited by 2,624
Power in Top Management Teams: Dimensions, Measurement, and Validation
Finkelstein, S. (1992) · Academy of Management Journal · doi:10.5465/256485 · Cited by 2,389
Metadata
- Authors
- Abernethy, M. A., Kuang, Y. F., & Qin, B.
- Venue
- The Accounting Review
- Publisher
- American Accounting Association
- Published
- 2014-10-01
- Volume
- 90
- Issue
- 4
- Pages
- 1265-1306
- ISSN
- 0001-4826 (ISSN-L)
- 1558-7967
- OpenAlex
- W2008061591
- Cited by
- 233
- References
- 6
- FWCI
- 35.60
- Type
- journal article
- Language
- en
- Open access
- green
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