Does a “Ceo Chairman” Guarantee Better Performance from a Firm?

• Authors: Pavel Srbek , Ludwig O. Dittrich
• Languages of publication: EN

Abstracts

EN

This paper provides a brief review of the state of knowledge in the field of agency theory. The managerial power approach assumes that a chief executive officer is able to affect the scale of his or her pay. However, Kaplan (2012) and others see a different picture of the corporate-governance landscape, hence they provide certain market-based explanations for high compensation. Our paper examines the relationship between a firm’s performance and the amount of managerial compensation, and the ability of a CEO to affect a board’s decision regarding his or her total compensation. The dataset consists of 75 companies traded in the capital market in the US. Our panel dataset covers a 10-year period from 2004 to 2013. We developed a single equation panel data model. The resulting parameter values provide a different picture of CEO power and the interconnection between a firm’s performance and CEO pay in both sectors.

Keywords

EN

Agency Problem; Incentive Plan; Board of Directors; CEO Compensation; Realized Pay

• Publisher: Sciendo
• Journal: DANUBE: Law and Economics Review
• Year: 2016
• Volume: 7
• Issue: 3
• Pages: 145-160

Dates

published

2016-09-01

online

2016-10-20

Contributors

author

Pavel Srbek

• Czech University of Life Sciences Prague, Faculty of Economics and Management, Kamýcká 129, 165 21 Prague 6 – Suchdol, Czech Republic

author

Ludwig O. Dittrich

• Czech University of Life Sciences Prague, Faculty of Economics and Management, Kamýcká 129, 165 21 Prague 6 – Suchdol, Czech Republic

Identifiers

DOI

10.1515/danb-2016-0009