Monitoring and CEO contractual incentive pay

Fan Yu*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


This paper finds that a CEO who is better monitored tends to have smaller wealth-performance sensitivity (WPS). The results are consistent with the optimal contracting view and are robust to different measures of WPS. The findings suggest caution in drawing conclusions when researchers use WPS as an observable outcome of monitoring to test the effectiveness of monitoring. The association of monitoring and WPS is not necessarily positive, as assumed by prior corporate governance research.

Original languageEnglish
Pages (from-to)701-736
Number of pages36
JournalInternational Review of Finance
Issue number3
Early online date28 Oct 2018
Publication statusPublished - 1 Sept 2020


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