An Empirical Examination of Compensation of REIT Managers

Marc C. Chopin (), Ross N. Dickens and Roger M. Shelor ()
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Marc C. Chopin: Department of Economics and Finance College of Administration and Business Louisiana Tech University PO Box 10318, T.S. Rouston, Louisiana 71272, http://www.cab.latech.edu/
Ross N. Dickens: Department of Economics and Finance College of Administration and Business Louisiana Tech University PO Box 10318, T.S. Rouston, Louisiana 71272, http://www.cab.latech.edu/
Roger M. Shelor: Department of Economics and Finance College of Administration and Business Louisiana Tech University PO Box 10318, T.S. Rouston, Louisiana 71272, http://www.cab.latech.edu/

Journal of Real Estate Research, 1995, vol. 10, issue 3, pages 263-278

Abstract: Principal-agent literature finds that manager and owner incentives can be aligned with performance contingent contracts. We investigate the compensation of Real Estate Investment Trust (REIT) industry executives. The competitive nature of mortgage and equity markets, in conjunction with the corporate tax exemption available when REITs distribute most of their earnings as dividends, is likely to influence the compensation of REIT managers. Executive compensation is modeled as a function of revenues and unexpected profit. After transforming the model to reduce collinearity and heteroskedasticity, we find compensation to be generally positively related to revenue. We also find unexpected profit to be generally insignificantly related to compensation, but positively related in those cases where it is significant.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1995
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