New Design Principles for Executive Pay

Alexander Pepper
Additional contact information
Alexander Pepper: London School of Economics and Political Science

Chapter 7 in The Economic Psychology of Incentives, 2015, pp 129-143 from Palgrave Macmillan

Abstract: Abstract In this book I have constructed a theory which links the performance of an individual senior executive, the performance of other executives who are part of the same top-management team and corporate performance. I have analysed the key elements of extrinsic motivation and explained the importance of intrinsic motivation. I have demonstrated how fairness, or inequity aversion as it is sometimes known, impacts on the perceived value of rewards and incentives. This chapter begins by summarising the main elements of behavioural agency theory, before examining the implications of the theory for the design of executive compensation strategies. It continues by explaining why these design principles are not enough in themselves to change executive pay practices, and comments on the necessity of institutional change if current concerns about executive compensation are to be adequately addressed.

Keywords: Intrinsic Motivation; Extrinsic Motivation; Executive Compensation; Senior Executive; Inequity Aversion (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:pal:palchp:978-1-137-40925-6_7

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137409256

DOI: 10.1057/9781137409256_7

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().