סמינר בהתנהגות ארגונית

Executive Compensation Complexity and Firm Performance
Burkert, Steffen; Oberpaul, Tobias; Tichy, Nicolas; Weller, Ingo

Ingo Weller, LMU Munich

With unknown consequences, the complexity of executive compensation contracts is rising. Based on behavioral agency theory, we theorize how complexity in executive compensation contracts and the dispersion of such complexity within the top management team (TMT) relate negatively to subsequent firm performance, and test this theory with a large sample of publicly traded U.S. firms. Our results suggest that firm performance benefits from executive compensation contracts that are simple and similarly complex across the TMT. We discuss the implications of these findings.