CEO Compensation
This paper surveys the recent literature on CEO compensation. The rapid rise in CEO pay over the past 30 years has sparked an intense debate about the nature of the pay-setting process. Many view the high level of CEO compensation as the result of powerful managers setting their own pay. Others inte...
| Main Authors: | , |
|---|---|
| Other Authors: | |
| Format: | Article |
| Language: | en_US |
| Published: |
Annual Review
2011
|
| Online Access: | http://hdl.handle.net/1721.1/65955 |
| _version_ | 1826188878461009920 |
|---|---|
| author | Frydman, Carola Jenter, Dirk |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Frydman, Carola Jenter, Dirk |
| author_sort | Frydman, Carola |
| collection | MIT |
| description | This paper surveys the recent literature on CEO compensation. The rapid rise in CEO pay over the past 30 years has sparked an intense debate about the nature of the pay-setting process. Many view the high level of CEO compensation as the result of powerful managers setting their own pay. Others interpret high pay as the result of optimal contracting in a competitive market for managerial talent. We describe and discuss the empirical evidence on the evolution of CEO pay and on the relationship between pay and firm performance since the 1930s. Our review suggests that both managerial power and competitive market forces are important determinants of CEO pay, but that neither approach is fully consistent with the available evidence. We briefly discuss promising directions for future research. |
| first_indexed | 2024-09-23T08:06:23Z |
| format | Article |
| id | mit-1721.1/65955 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T08:06:23Z |
| publishDate | 2011 |
| publisher | Annual Review |
| record_format | dspace |
| spelling | mit-1721.1/659552022-09-23T10:55:57Z CEO Compensation Frydman, Carola Jenter, Dirk Sloan School of Management Frydman, Carola Frydman, Carola This paper surveys the recent literature on CEO compensation. The rapid rise in CEO pay over the past 30 years has sparked an intense debate about the nature of the pay-setting process. Many view the high level of CEO compensation as the result of powerful managers setting their own pay. Others interpret high pay as the result of optimal contracting in a competitive market for managerial talent. We describe and discuss the empirical evidence on the evolution of CEO pay and on the relationship between pay and firm performance since the 1930s. Our review suggests that both managerial power and competitive market forces are important determinants of CEO pay, but that neither approach is fully consistent with the available evidence. We briefly discuss promising directions for future research. 2011-09-23T20:06:13Z 2011-09-23T20:06:13Z 2010-12 Article http://purl.org/eprint/type/JournalArticle 1941-1375 1941-1367 http://hdl.handle.net/1721.1/65955 Frydman, Carola, and Dirk Jenter. “CEO Compensation.” Annual Review of Financial Economics 2 (2010): 75-102. en_US http://dx.doi.org/10.1146/annurev-financial-120209-133958 Annual Review of Financial Economics Creative Commons Attribution-Noncommercial-Share Alike 3.0 http://creativecommons.org/licenses/by-nc-sa/3.0/ application/pdf Annual Review MIT web domain |
| spellingShingle | Frydman, Carola Jenter, Dirk CEO Compensation |
| title | CEO Compensation |
| title_full | CEO Compensation |
| title_fullStr | CEO Compensation |
| title_full_unstemmed | CEO Compensation |
| title_short | CEO Compensation |
| title_sort | ceo compensation |
| url | http://hdl.handle.net/1721.1/65955 |
| work_keys_str_mv | AT frydmancarola ceocompensation AT jenterdirk ceocompensation |