The fit between CEO compensation design and firm risk

• 成果类型: Article
• 署名作者: Miller, JS; Wiseman, RM; Gomez-Mejia, LR
• 署名单位: University of Wisconsin System; University of Wisconsin Milwaukee; Michigan State University; Michigan State University's Broad College of Business; Arizona State University; Arizona State University-Tempe
• 刊物名称: ACADEMY OF MANAGEMENT JOURNAL
• ISSN/ISSBN: 0001-4273
• DOI: 10.5465/3069308
• 发表日期: 2002
• 页码: 745-756
• 关键词: AGENCY-THEORY; OWNERSHIP; performance; incentives; BOARD; principal

摘要

We examined the effects of unsystematic and systematic firm risk on CEO compensation risk bearing and total pay. Both the proportion of variable pay in CEO pay packages and their magnitude are curvilinearly related to unsystematic firm risk-that is, they are highest under conditions of moderate firm-specific risk. Our results are consistent with agency theory predictions that both performance-contingent pay and the greater earnings potential associated with that form of pay are highest when an agent has greater control over performance outcomes.