Discussion of “Explicit relative performance evaluation in performance-vested equity grants”

Fabrizio Ferri ()
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Fabrizio Ferri: Harvard University

Review of Accounting Studies, 2009, vol. 14, issue 2, No 7, 307-313

Abstract: Abstract Carter, Ittner and Zechman (2009) examine the use of explicit relative performance evaluation (RPE) conditions in performance-vested equity plans in a sample of United Kingdom (U.K.) firms in 2002. They find that factors suggested by economic theories (for example, removal of common shocks, tournament theory) are more closely associated with specific features of the plan than with the firm-level decision to use an RPE equity plan. My discussion focuses on the interpretation of these findings and the opportunities and implications for future research. I also summarize the views of five U.K. directors who were involved in the design and use of performance-vested equity plans.

Keywords: Relative performance evaluation; Performance-based vesting conditions; Equity plans; Executive pay (search for similar items in EconPapers)
JEL-codes: G30 M41 (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1007/s11142-009-9092-9

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