Duration of executive compensation

• Autores: Radhakrishnan Gopalan, Todd Milbourn, Fenghua Song, Anjan V. Thakor
• Localización: The Journal of finance, ISSN 0022-1082, Vol. 69, Nº 6, 2014, págs. 2777-2817
• Idioma: inglés
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• Dialnet Métricas: 5 Citas
• Resumen

  • Extensive discussions on the inefficiencies of �short-termism� in executive compensation notwithstanding, little is known empirically about the extent of such short-termism. We develop a novel measure of executive pay duration that reflects the vesting periods of different pay components, thereby quantifying the extent to which compensation is short-term. We calculate pay duration in various industries and document its correlation with firm characteristics. Pay duration is longer in firms with more growth opportunities, more long-term assets, greater R&D intensity, lower risk, and better recent stock performance. Longer CEO pay duration is negatively related to the extent of earnings-increasing accruals.