Performance Pay and Top Management Incentives

@article{Murphy1990PerformancePA,
  title={Performance Pay and Top Management Incentives},
  author={Kevin J. Murphy and Michael C. Jensen},
  journal={Microeconomic Theory eJournal},
  year={1990}
}
  • Kevin J. Murphy, Michael C. Jensen
  • Published 1990
  • Economics, Business
  • Microeconomic Theory eJournal
  • Our estimates of the pay-performance relation (including pay, options, stockholdings, and dismissal) for chief executive officers indicate that CEO wealth changes $3.25 for every $1,000 change in shareholder wealth. Although the incentives generated by stock ownership are large relative to pay and dismissal incentives, most CEOs hold trivial fractions of their firms' stock, and ownership levels have declined over the past 50 years. We hypothesize that public and private political forces impose… CONTINUE READING
    5,609 Citations
    CEO Pay, Shareholder Returns, and Accounting Profits
    • 8
    • PDF
    Pay, Performance, and Turnover of Bank CEOs
    • 472
    • PDF
    Executive Pay and Shareholder Litigation
    • 192
    Top Management Pay: Impact of Overt and Covert Power
    • 73
    • Highly Influenced
    Executive Pay and Firm Performance
    • 407

    References

    SHOWING 1-10 OF 57 REFERENCES
    Corporate performance and managerial remuneration: An empirical analysis
    • 1,755
    Outside directors and CEO turnover
    • 4,008
    The effects of management buyouts on operating performance and value
    • 1,108
    • Highly Influential
    Incentives, learning, and compensation: a theoretical and empirical investigation of managerial labor contracts
    • 516
    The self-serving management hypothesis: Some evidence
    • 199
    Stock prices and top management changes
    • 1,565
    • PDF