Monitoring and CEO contractual incentive pay

Fan Yu

doi:10.1111/irfi.12238

Monitoring and CEO contractual incentive pay

Fan Yu^*

^*Corresponding author for this work

Department of Applied Finance

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

Abstract

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 language	English
Pages (from-to)	701-736
Number of pages	36
Journal	International Review of Finance
Volume	20
Issue number	3
Early online date	28 Oct 2018
DOIs	https://doi.org/10.1111/irfi.12238
Publication status	Published - 1 Sept 2020

Access to Document

10.1111/irfi.12238

Cite this

@article{f365e8b0d7c64122aefc24084e27f435,

title = "Monitoring and CEO contractual incentive pay",

abstract = "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.",

author = "Fan Yu",

year = "2020",

month = sep,

day = "1",

doi = "10.1111/irfi.12238",

language = "English",

volume = "20",

pages = "701--736",

journal = "International Review of Finance",

issn = "1369-412X",

publisher = "John Wiley & Sons",

number = "3",

}

TY - JOUR

T1 - Monitoring and CEO contractual incentive pay

AU - Yu, Fan

PY - 2020/9/1

Y1 - 2020/9/1

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=85055716120&partnerID=8YFLogxK

U2 - 10.1111/irfi.12238

DO - 10.1111/irfi.12238

M3 - Article

AN - SCOPUS:85055716120

SN - 1369-412X

VL - 20

SP - 701

EP - 736

JO - International Review of Finance

JF - International Review of Finance

IS - 3

ER -

Monitoring and CEO contractual incentive pay

Abstract

Access to Document

Other files and links

Fingerprint

Monitoring, Contractual Incentive Pay, and the Structure of CEO Equity-Based Compensation