Management Fashion Pay-for-Performance for CEOs

Katja Rost and Margit Osterloh

Schmalenbach Business Review (sbr), 2009, vol. 61, issue 2, 119-149

Abstract: We show theoretically and empirically that Pay-for-Performance, like many manage-ment fashions, has not achieved its intended aim. Our research focuses on previous empirical studies that examine the relation between variable executive pay and firm performance on various different dates. Our results indicate that a variable ceo income contributes very little to the increase of the firm’s performance, and that ceo salary and firm performance are not linked. The example of Pay-for-Performance shows that in the long run, many management fashions do not solve the problems that they promise to solve.

Keywords: CEO compensation; Corporate Governance; Crowding Out; Management Fashion; Pay-for-Performance (search for similar items in EconPapers)
JEL-codes: G35 J41 O31 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (11)

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