Public versus private governance: a study of incentives and operational performance

• 成果类型: Article
• 署名作者: Eldenburg, L; Krishnan, R
• 署名单位: University of Arizona; Michigan State University; Michigan State University's Broad College of Business
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/S0165-4101(03)00038-7
• 发表日期: 2003
• 关键词: compensation; institutions; management; SYSTEM; pay

摘要

This study explores incentives and performance in organizations governed by publicly elected boards of directors and subsidized by taxes. Such organizations are likely to underpay Chief Executive Officers (CEOs), resulting in selection and incentive problems and hence poor operating performance. We compare municipal district hospitals to private nonprofit hospitals. CEO compensation in district hospitals is significantly lower than in the nonprofits. Operating margins in district hospitals are lower and deteriorate more rapidly over time. We rule out a number of other factors that could explain differences in performance. We conclude that the weak governance structure hampers district hospitals. (C) 2003 Elsevier B.V. All rights reserved.