Compensation design and political risk: the case of city managers

• 成果类型: Article
• 署名作者: Compton, Ying L.; Gore, Angela K.; Kulp, Susan L.
• 署名单位: U.S. Securities & Exchange Commission (SEC); George Washington University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-016-9379-6
• 发表日期: 2017
• 页码: 109-140
• 关键词: pay; incentives; finance

摘要

Although theory suggests its importance, empirical evidence on the relation between exogenous termination risk and contracted compensation packages is limited. This study takes a different approach by exploring determinants of contracted annual compensation and severance packages for city managers. Results indicate that managers exposed to greater exogenous political risk- i.e., those employed by municipalities where voters are more likely to recall elected officials-are 6 %-11 % more likely to receive severance, and receive, on average, 12 %-24 % more severance pay, but do not receive more annual compensation. Additional analyses suggest that the relation between contracted municipal severance and political risk primarily exists in states without restrictions on voters' ability to file recalls and in municipalities with strong public sector unions. Findings also suggest that municipalities with greater expected agency problems between managers and citizens offer significantly more contracted annual compensation and severance pay.