Does it pay to 'Be Like Mike'? Aspiratonal peer firms and relative performance evaluation

• 成果类型: Article
• 署名作者: Ball, Ryan T.; Bonham, Jonathan; Hemmer, Thomas
• 署名单位: University of Michigan System; University of Michigan; University of Chicago; Rice University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-020-09540-1
• 发表日期: 2020
• 页码: 1507-1541
• 关键词: compensation; executives; turnover; RISK; luck; CEOS

摘要

We examine the manner and extent to which firms evaluate performance relative to aspirational peer firms. Guided by the predictions of an agency model, we find that CEO compensation increases in the correlation between own and aspirational peer firm performances. In addition, we define and test conditions where aggregate peer performance, which has been the primary focus of prior relative performance evaluation studies of competitive peers, is expected to have an association with CEO compensation. These conditions are supported by our empirical results. Finally, we document that our results are more pronounced when the firm-peer relationship is one-way and the peer firm is in a different industry and therefore is more aspirational.