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| Author: | Hartzell, J. C. Starks, L. T. |
| Title: | Institutional investors and executive compensation |
| Journal: | Journal of Finance
2003 : DEC, VOL. 58:6, p. 2351-2374 |
| Index terms: | Institutional investors Company ownership |
| Language: | eng |
| Abstract: | The authors find that institutional ownership is positively related to the pay-for-performance sensitivity of executive compensation and negatively related to the level of compensation, even after controlling for firm size, industry, investment opportunities, and performance. The results suggest that the institutions serve a monitoring role in mitigating the agency problem between shareholders and managers. The authors find also that clientele effects exist among institutions for firm with certain compensation structures, suggesting that institutions also influence compensation structures through their preferences. |
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