How much does the CEO matter? The role of managerial discretion in the setting of CEO compensation

• 成果类型: Review
• 署名作者: Finkelstein, S; Boyd, BK
• 署名单位: Dartmouth College; Arizona State University; Arizona State University-Tempe
• 刊物名称: ACADEMY OF MANAGEMENT JOURNAL
• ISSN/ISSBN: 0001-4273
• DOI: 10.5465/257101
• 发表日期: 1998
• 页码: 179-199
• 关键词: investment opportunity set; research-and-development; executive-compensation; ORGANIZATIONAL OUTCOMES; MANAGEMENT COMPENSATION; Performance evaluation; corporate performance; STRATEGIC MANAGEMENT; firm performance; industry matter

摘要

The idea that managerial discretion-defined as latitude of action-may be an important determinant of CEO compensation has been recognized for some time. However, in spite of considerable work that has implicitly invoked related ideas on the sources of potential managerial contribution, a formal test of the discretion hypothesis has yet to be conducted. In addition, few studies have tested the performance consequences of CEO pay. In a sample of Fortune 1,000 firms, we found support for both a main effect of managerial discretion on CEO pay and a contingency effect, whereby firm performance is higher when discretion and pay are aligned than when they are not.