| Tekijä: | Barron, J. M. Waddell, G. R. |
| Otsikko: | Executive Rank, Pay and Project Selection |
| Lehti: | Journal of Financial Economics
2003 : FEB, VOL. 67:2, p. 305-350 |
| Asiasana: | EXECUTIVES COMPENSATION AGENCY THEORY INCENTIVES |
| Kieli: | eng |
| Tiivistelmä: | This paper extends the literature on executive compensation by developing and testing a principal-agent model in the context of project selection. The model's focus on executive project selection decisions highlights the multidimensional nature of executive choices that affect the value of the firm. An executive not only makes an effort choice that determines the quality of information on which to base a decision but also sets the decision criteria for selecting projects. A project selection framework is also shown to introduce endogenous uncertainty into compensation that can influence the executive's effort choice. Using an extensive data set, the empirical work supports the main hypotheses of the model. |
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