Managerial compensation
Goergen,M. Renneboog,L.D.R.
Goergen,M.
Renneboog,L.D.R.
Abstract
We review the existing literature on managerial compensation, with particular reference to the two contrasting views about its main driver. On the one hand, managerial compensation is seen to be the result of a market-based mechanism which ensures that managers have adequate incentives to maximize shareholder value. On the other hand, it is regarded to be a means whereby self-serving executives skim corporate profits and expropriate shareholders. We find that most of the existing literature supports the latter view as executives tend to benefit from windfall earnings and are able to extract rents in the presence of weak corporate governance.
Description
Special Section: Managerial Compensation
Date
2011
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Research Projects
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Citation
Goergen, M & Renneboog, L D R 2011, 'Managerial compensation', Journal of Corporate Finance, vol. 17, no. 4, pp. 1068-1077. https://doi.org/10.1016/j.jcorpfin.2011.06.002