Performance Terms in CEO Compensation Contracts

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2014-04-25

Summary:

Editor's Note: The following post comes to us from David De Angelis of the Finance Area at Rice University and Yaniv Grinstein of the Samuel Curtis Johnson Graduate School of Management at Cornell University.

CEO compensation in U.S. public firms has attracted a great deal of empirical work. Yet our understanding of the contractual terms that govern CEO compensation and especially how the compensation committee ties CEO compensation to performance is still incomplete. The main reason is that CEO compensation contracts are, in general, not observable. For the most part, firms disclose only the realized amounts that their CEOs receive at the end of any given year. The terms by which the board determines these amounts are not fully disclosed.

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Link:

http://blogs.law.harvard.edu/corpgov/2014/04/25/performance-terms-in-ceo-compensation-contracts/

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Tags:

academic research empirical research executive compensation david de angelis executive performance pay for performance performance measures yaniv grinstein

Authors:

R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation,

Date tagged:

04/25/2014, 13:00

Date published:

04/25/2014, 09:03