دانلود رایگان مقاله تاثیر اندازه شرکت و قدرت مدیریتی بر جبران خسارت مازاد مدیر عامل شرکت

Abstract

Chief executive officer (CEO) compensation has received a great deal of attention over the past several decades. Critics assert that CEO compensation is “excessive” because it is only weakly linked to firm performance (i.e., managerial rent-extraction). On the other hand, defenders suggest that CEO compensation is “justified” given the incremental shareholder wealth created by CEOs, or that large CEO compensation packages merely reflect labor market forces. Prior research documents that CEO power and firm size are associated with larger compensation, but providing evidence that the larger compensation is excessive (i.e., not economically justified) has proven difficult. For each test firm we identify a potential replacement CEO (i.e., an executive-specific, within-country (US) compensation benchmark) and create an empirical test of excess compensation. We also examine the possibility that excess compensation is conditional upon firm size or CEO power. In spite of an inherent bias against finding excess compensation, the results suggest that the most powerful CEOs receive compensation that is not economically justified. We find no evidence of CEO excess compensation in the largest firms.

7. Summary and concluding remarks

While there are persistent claims in the business media and academic literature that CEO compensation is excessive, prior research has grappled with the difficulty of developing a method for measuring excessive CEO compensation. Conyon et al. (2011) assume that UK CEOs are not paid excess compensation, and therefore provide a good benchmark for measuring excess US CEO compensation. Their approach has the advantage of using a set of control firms that do not have inflated compensation, but is subject to inter-economy effects. They find that, US CEOs are paid substantially more than UK CEOs, but after adjusting for equity-related risk premiums, they conclude that the larger US CEO compensation is not excessive. We extend Conyon et al. (2011) by developing a domestic benchmark for US firms. Specifically, we compare CEOs to potential replacement CEOs, and determine if the differences in compensation can be explained by CEO ability, CEO effort or equity risk premiums. Compensation not related to CEO ability, CEO effort or equity risk premiums is considered excessive (i.e., not economically justified). Additionally, we separately examine contexts related to firm size and CEO power in which CEO compensation may be more likely to be excessive. Using a model that is biased towards not finding excess compensation, we find evidence that the most powerful CEOs receive compensation that is not economically justified. Our results are consistent with the managerial power theory, and suggest that the awarding of excess CEO compensation is a function of CEO power.We do not find evidence that firm size is related to excess compensation. This paper identifies a context in which large CEO compensation should be viewed with skepticism.