Executive Compensation, Political Economy, and Managerial Control: The Transformation of Managerial Incentive Structures and Ideology, 1950-2000

2003 ◽  
Author(s):  
Ernie Englander ◽  
Allen Kaufman
Keyword(s):  
Political Economy ◽  
Executive Compensation ◽  
Managerial Control ◽  
Managerial Incentive ◽  
Incentive Structures

Top Management Incentives and the Pricing of Corporate Public Debt

2006 ◽  
Vol 41 (2) ◽  
pp. 317-340 ◽  
Author(s):  
Hernan Ortiz-Molina
Keyword(s):  
Stock Options ◽  
Sample Selection ◽  
Managerial Ownership ◽  
Managerial Incentive ◽  
Yield Spreads ◽  
Management Incentives ◽  
Incentive Structures ◽  
Equity Ownership ◽  
Effect On Yield ◽  
Bond Characteristics

AbstractThis article examines managerial ownership structure and at-issue yield spreads on corporate bonds. There is a positive relation between managerial ownership and borrowing costs, and this relation is weaker at higher levels of ownership. In addition, managerial stock options have a larger effect on yield spreads than stock ownership. These effects exist after controlling for firm and bond characteristics, and are robust to endogeneity and sample selection concerns. The evidence suggests that rational bondholders price new debt issues using the information about a firm's future risk choices contained in managerial incentive structures, and that lenders anticipate higher risk-taking incentives from managerial stock options than from equity ownership.

scholarly journals AVERSION TO THE VARIABILITY OF PAY AND THE STRUCTURE OF EXECUTIVE COMPENSATION CONTRACTS

2015 ◽  
Vol 16 (4) ◽  
pp. 712-732 ◽  
Author(s):  
Pierre Chaigneau
Keyword(s):  
Executive Compensation ◽  
Practical Implication ◽  
Performance Measure ◽  
Managerial Compensation ◽  
Necessary Condition ◽  
Managerial Incentive ◽  
Compensation Contracts ◽  
Agent Model ◽  
Principal Agent Model ◽  
Mean Variance

This paper presents a new implication of an aversion toward the variance of pay (“risk aversion”) for the structure of managerial incentive schemes. In a principal-agent model in which the effort of a manager with mean-variance preferences affects the mean of a performance measure, we find that managerial compensation must be such that the variance of payments is decreasing in effort. From an ex-ante perspective, which is relevant for effort inducement, this maximizes the rewards associated to high effort, and the punishments associated to low effort. An important practical implication is that convex incentive contracts do not satisfy this necessary condition for optimality, which calls into question the practice of granting executive stock options. The paper therefore contributes to the debate on the efficiency of executive compensation.

Managerial Control, Performance, and Executive Compensation

1987 ◽  
Vol 30 (1) ◽  
pp. 51-70 ◽  
Author(s):  
Luis R. Gomez-mejia ◽  
Henry Tosi ◽  
Timothy Hinkin
Keyword(s):  
Executive Compensation ◽  
Control Performance ◽  
Managerial Control

MANAGERIAL CONTROL, PERFORMANCE, AND EXECUTIVE COMPENSATION.

1987 ◽  
Vol 30 (1) ◽  
pp. 51-70 ◽  
Author(s):  
L. R. Gomez-Mejia ◽  
H. Tosi ◽  
T. Hinkin
Keyword(s):  
Executive Compensation ◽  
Control Performance ◽  
Managerial Control

Zur Politischen Ökonomie der Arbeitslosigkeit: Mancur Olson versus Insider-Outsider-Theorie

1997 ◽  
Vol 46 (3) ◽  
Author(s):  
Ansgar Belke
Keyword(s):  
Political Economy ◽  
Collective Action ◽  
Labour Market ◽  
Market Reforms ◽  
High Unemployment ◽  
Pressure Groups ◽  
Labour Market Reforms ◽  
Incentive Structures ◽  
Mancur Olson

AbstractIn explaining persistently high unemployment, Mancur Olson’s logic of collective action and the insider-outsider approach both focus on simular incentive structures of pressure groups. This contribution examines the astonishingly rarely tested hypothesis that both approaches are compatible to be integrated in a broader and widely acceptable basis for overdue labour market reforms. Moreover, a straightforward political economy of reforms is derived from this synthesis. However, a deeper comparison reveals that both models also share a great weakness. They clearly do not incorporate interests common to insiders and outsiders and self-correcting mechanisms in the wake of steadily growing costs of unemployment.

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