search query: @indexterm PAY INCENTIVES / total: 165
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| Author: | Jensen, M. C. Murphy, K. J. |
| Title: | Performance pay and top-management incentives. |
| Journal: | Journal of Political Economy
1990 : APR, VOL. 98:2, p. 225-264 |
| Index terms: | PAY INCENTIVES EXECUTIVE REMUNERATION TOP MANAGEMENT |
| Language: | eng |
| Abstract: | Estimates of the pay-performance relation (including pay, options, stockholdings, and dismissal) for chief executive officers (CEOs) indicate that CEO wealth changes USD 3.25 for every USD 1,000 change in shareholder wealth. Although the incentives generated by stock ownership are large relative to pay and dismissal incentives, most CEOs hold trivial fractions of their firms' stock, and ownership levels have declined over the past 50 years. It is stated that public and private political forces impose constraints that reduce the pay-performance sensitivity. Declines in both the pay-performance relation and the level of CEO pay since the 1930s are consistent with this observation. |
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