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| Author: | Abowd, J. M. |
| Title: | Does performance-based managerial compensation affect corporate performance? |
| Journal: | Industrial and Labor Relations Review
1990 : FEB, VOL. 43:3, p. 52-73 |
| Index terms: | COMPANY PERFORMANCE COMPENSATION MANAGERS PERFORMANCE APPRAISAL PAYMENT BY RESULTS |
| Language: | eng |
| Abstract: | In order to quantify the potential gains from performance-based managerial compensation, two related models of the connection between increased performance-sensitivity in compensation and increased subsequent corporate performance are specified. Using 1981-85 data on more than 16,000 managers an investigation is conducted whether the sensitivity of managerial compensation to corporate performance in one year is positively related to corporate performance in the next year. Accounting-based measures of performance yield only weak evidence of such an association, but economic and market measures yield stronger evidence. |
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