%0 Journal Article %1 TosiGomez-Mejia:1989 %A Tosi, H. %A Gomez-Mejia, L. %D 1989 %J Administrative Science Quarterly %K business management performance theory %N 1 %P 169--189 %T The Decoupling of CEO Pay and Performance: An Agency Theory Perspective %V 34 %X This paper examines the extent to which monitoring and incentive alignment of Chief Executive (CEO) compensation and influence patterns of various actors on CEO pay vary as a function of ownership distribution within the firm. Based on the reports of 175 chief compensation officers in manufacturing, it was found that the level of monitoring and incentive alignment was greater in owner-controlled than management-controlled firms. For both types of firms, there was a direct relationship between monitoring and the risk level to the CEO of annual bonuses and long-term income, although the relationship was stronger among owner-controlled firms. In the owner-controlled firms, there was more influence over CEO pay by major stockholders and boards of directors. In management-controlled firms, the CEO pay influence was separated from major stockholders and boards. The results suggest that a behavioral approach to measuring agency theory concepts can provide some new insights into the process used to determine CEO pay.

@article{TosiGomez-Mejia:1989, abstract = {This paper examines the extent to which monitoring and incentive alignment of Chief Executive (CEO) compensation and influence patterns of various actors on CEO pay vary as a function of ownership distribution within the firm. Based on the reports of 175 chief compensation officers in manufacturing, it was found that the level of monitoring and incentive alignment was greater in owner-controlled than management-controlled firms. For both types of firms, there was a direct relationship between monitoring and the risk level to the CEO of annual bonuses and long-term income, although the relationship was stronger among owner-controlled firms. In the owner-controlled firms, there was more influence over CEO pay by major stockholders and boards of directors. In management-controlled firms, the CEO pay influence was separated from major stockholders and boards. The results suggest that a behavioral approach to measuring agency theory concepts can provide some new insights into the process used to determine CEO pay.}, added-at = {2010-03-02T17:25:53.000+0100}, author = {Tosi, H. and Gomez-Mejia, L.}, bdsk-file-1 = {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}, bdsk-url-1 = {http://www.jstor.org/stable/info/2989894}, biburl = {https://www.bibsonomy.org/bibtex/2628d8471d0c3f9354efaebbd4e222e94/jrennstich}, date-modified = {2010-02-28 21:03:37 -0500}, interhash = {dbe30887b3d868d02e5f0ef8b889fc56}, intrahash = {628d8471d0c3f9354efaebbd4e222e94}, journal = {Administrative Science Quarterly}, keywords = {business management performance theory}, month = {June}, number = 1, pages = {169--189}, timestamp = {2010-03-02T17:28:42.000+0100}, title = {The Decoupling of {CEO} Pay and Performance: An Agency Theory Perspective}, volume = 34, year = 1989 }