haku: @journal_id 62 / yhteensä: 680
viite: 105 / 680
| Tekijä: | Narayanan, M. P. |
| Otsikko: | Form of compensation and mangerial decision horizon |
| Lehti: | Journal of Financial and Quantitative Analysis
1996 : DEC, VOL. 31:4, p. 467-491 |
| Asiasana: | COMPENSATION MANAGERS DECISION MAKING COMPETITIVENESS |
| Kieli: | eng |
| Tiivistelmä: | This study examines the relation between the manager's decision horizon and the form of compensation, and it finds that while all-cash contracts induce managers to underinvest in the long-term, all-stock contracts induce overinvestment in the long term. Compensation contracts consisting of both cash and restricted stock can produce efficient investment, thereby providing a rationale for the existence of both cash and stock incentive schemes in executive compensation packages. The study derives that the proportion of stock compensation is decreasing in the precision of manager's ability and increasing in the precision of the firm's cash flows; firms compensate their managers with more stock in profitable years and more cash in leaner years; greater growth opportunities give higher proportion of stock compensation. |
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