CEO Compensation and Shareholder Value Orientation Among Large US Firms
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| 1. | Title | Title of document | CEO Compensation and Shareholder Value Orientation Among Large US Firms |
| 2. | Creator | Author's name, affiliation, country | Taekjin Shin; University of Illinois, USA |
| 3. | Subject | Discipline(s) | |
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| 4. | Description | Abstract | The rise of shareholder value orientation among US firms has been studied extensively during the past few decades as a key component of financialisation. The firm-level mechanisms of how such institutional changes have affected firm behaviours are not well understood, however. This study examines the relationship between the shareholder value orientation of firms and financial rewards for the executive managers who run those companies. Using compensation data for 290 CEOs for an 11-year period, I demonstrate that CEOs at the firms with the appearance of shareholder value orientation – such as monitoring and incentive-alignment mechanisms – receive greater compensation than non-shareholder-value-orientation CEOs. Moreover, when the firms strengthen the appearance of shareholder value orientation, CEO pay increases the subsequent year. This suggests that firms adopt monitoring and incentive-alignment mechanisms in order to gain the appearance of shareholder value orientation rather than to curb executive compensation. By employing such symbolic management tactics, top managers at such firms earn greater legitimacy, a better reputation, and a higher valuation of the firms and executive talent. The findings suggest that executive compensation has played an important role in providing incentives for top managers to make strategic decisions that conform to the shareholder value maximisation principle. |
| 5. | Publisher | Organizing agency, location | |
| 6. | Contributor | Sponsor(s) | |
| 7. | Date | (YYYY-MM-DD) | 2013-02-19 |
| 8. | Type | Status & genre | Peer-reviewed Article |
| 8. | Type | Type | |
| 9. | Format | File format | |
| 10. | Identifier | Uniform Resource Identifier | http://www.esr.ie/article/view/36 |
| 11. | Source | Title; vol., no. (year) | The Economic and Social Review; Vol 43, No 4, Winter (2012): Dublin Workshop on Politics of Financialisation, May 24 2012, University College Dublin/Geary Institute |
| 12. | Language | English=en | en |
| 13. | Relation | Supp. Files | |
| 14. | Coverage | Geo-spatial location, chronological period, research sample (gender, age, etc.) | |
| 15. | Rights | Copyright and permissions |
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