Top Management Team Incentive Dispersion and Managerial Efficiency

Hongkang Xu, Rachana Kalelkar and Long Liu

Australian Accounting Review, 2024, vol. 34, issue 2, 156-177

Abstract: This study examines the association between dispersion in pay‐performance sensitivities (PPS) among top management team (TMT) members and managerial efficiency. While prior research has focused on managerial efficiency as an innate characteristic of managers, this study explores how managerial incentive dispersion shapes managerial efficiency. Using a sample of US firms from 1993 to 2019, we find a negative relationship between TMT incentive dispersion and managerial efficiency, suggesting that higher levels of incentive dispersion can potentially affect managerial efficiency by reducing coordination and cooperation among TMT members. We employ a range of robustness tests and find consistent and robust results. Overall, this study contributes to the literature on executive compensation by providing novel insights into the implications of incentive dispersion among executives for managerial efficiency.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/auar.12418

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ausact:v:34:y:2024:i:2:p:156-177

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1035-6908

Access Statistics for this article

Australian Accounting Review is currently edited by Linda M. English

More articles in Australian Accounting Review from CPA Australia
Bibliographic data for series maintained by Wiley Content Delivery ().