Top-Management-Teams' Compensation Packages

51 Pages Posted: 5 Aug 2008

Date Written: August 1, 2008

Abstract

The purpose of this work is to study on compensation packages for top management teams. The analysis focuses on the annual pay plus change in equity portfolio value, how its level, pay-performance sensibility and structure vary across managerial categories, and the impact of these variations on corporate performance. Using a multilevel mixed-model approach on 589 companies from the S&P 1500 between 1998 and 2005, the evidence shows that CEO compensation packages are not isomorphic to those of non-CEO executives, while on average no significant differences are found between divisional and corporate executives. Despite this, the random effects show that differences between two categories vary across companies, with shareholder return been lower for companies where differences between corporate and divisional managers are greater.

Keywords: Executives, Incentives, Performance, Divisional Firms

JEL Classification: L25, M12, M4, M52

Suggested Citation

Etiennot, Hernan, Top-Management-Teams' Compensation Packages (August 1, 2008). AAA 2009 Management Accounting Section (MAS) Meeting Paper, Available at SSRN: https://ssrn.com/abstract=1194542 or http://dx.doi.org/10.2139/ssrn.1194542

Hernan Etiennot (Contact Author)

IAE Business School ( email )

Buenos Aires
Argentina

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