haku: @indexterm executive remuneration / yhteensä: 207
viite: 16 / 207
| Tekijä: | Schöndube-Pirchegger, B. Schöndube, J.R. |
| Otsikko: | On the appropriateness of performance-based compensation for supervisory board members - An agency theoretic approach |
| Lehti: | European Accounting Review
2010 : VOL. 19:4, p. 817-835 |
| Asiasana: | board of directors corporate governance executive remuneration management compensation pay employees fringe benefits models Central Europe |
| Kieli: | eng |
| Tiivistelmä: | In Central Europe, in countries e.g. Austria, Germany and the Netherlands public firms are required to set up two separate boards: 1. a management board (MB) for managing the firm and 2. a supervisory board (SB) for controlling the management. Related to the recent debate on corporate governance, the expansion of performance based compensation to include SB members has been heavily discussed. In this paper, a 2-stage principal-agent model is used to examine incentive effects arising from this contracting. The SB is responsible for contracting with the MB and for monitoring it. Two types of performance measures are allowed for to be available, a possibly biased financial report provided by the MB and the market price of the firm. The results are as follows: Both performance measures are beneficial and equally suitable for contracting with the MB. On the contrary, the MB's report is never part of the optimal SB contract. Using the market price as a performance measure for the SB in some settings turns out to be beneficial compared with a purely fixed compensation, yet not in others. |
SCIMA