The Effect of Adoption of Long-Term Performance Plans on Stock Prices and Accounting Numbers

Kumar, Raman; Sopariwala, Parvez R.

doi:10.2307/2331140

Cited by 64 publications

(43 citation statements)

References 12 publications

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“…Jensen and Meckling (1976) [29], Jensen and Murphy (1990) [30] suggest that stock options are effective in better aligning the interests of both parties and managers have incentives to take decisions and actions that increase share value. Kumar and Sopariwala (1992) [35] reported results consistent with the notion that stock based plans reduce the agency problem. Significant positive excess returns were found around the announcement of plan adoption.…”

Section: Arguments In Favor Of Issuance Of Esopssupporting

confidence: 62%

A Review of Employee Stock Option Plans: Panacea or Pandora’s Box for Firm Performance

Kalra¹,

Bagga²

2017

International Journal of Management Excellence

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Section: Arguments In Favor Of Issuance Of Esopssupporting

confidence: 62%

A Review of Employee Stock Option Plans: Panacea or Pandora’s Box for Firm Performance

Kalra¹,

Bagga²

2017

International Journal of Management Excellence

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“…This relationship has been found to hold for the US, for example Gibbons and Murphy (1992), Kumar and Sopariwala (1992), and Mehran (1995), and for the UK, for example Main (1991), Main and Johnson (1993) and Conyon and Leech (1994). In addition, Ingham and Thompson (1994) find that high chief executive pay, as measured by the efficiency wage, is associated with above average performance in the mutuality sector.…”

Section: Governance Mechanisms and The Market For Corporate Controlmentioning

confidence: 91%

Corporate governance, performance and take-overs: an empirical analysis of UK mergers

Weir¹

1997

Applied Economics

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“…Early studies focus on accounting-based long-term incentive plans. The introduction of such plans is followed by increases in capital investment (Larcker, 1983) and pro…tability (Kumar and Sopariwala, 1992). More recent studies investigate the correlation of stock and option holdings with a variety of outcomes.…”

Section: The E¤ects Of Pay On Policies Pro…tability and Executive Rmentioning

confidence: 99%

Executive Compensation: A Survey of Theory and Evidence

Edmans¹,

Gabaix²,

Jenter³

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper reviews the theoretical and empirical literature on executive compensation. We start by presenting data on the level of CEO and other top executive pay over time and across firms, the changing composition of pay; and the strength of executive incentives. We compare pay in U.S. public firms to private and non-U.S. firms. We then critically analyze three non-exclusive explanations for what drives executive pay -shareholder value maximization by boards, rent extraction by executives, and institutional factors such as regulation, taxation, and accounting policy. We confront each hypothesis with the evidence. While shareholder value maximization is consistent with many practices that initially seem inefficient, no single explanation can account for all facts and historical trends; we highlight major gaps for future research. We discuss evidence on the effects of executive pay, highlighting recent identification strategies, and suggest policy implications grounded in theoretical and empirical research. Our survey has two main goals. First, we aim to tightly link the theoretical literature to the empirical evidence, and combine the insights contributed by all three views on the drivers of pay. Second, we aim to provide a user-friendly guide to executive compensation, presenting shareholder value theories using a simple unifying model, and discussing the challenges and methodological issues with empirical research. JEL-Codes: D310, D860, G340, M120. Terms of use: Documents in

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The Effect of Adoption of Long-Term Performance Plans on Stock Prices and Accounting Numbers

Cited by 64 publications

References 12 publications

A Review of Employee Stock Option Plans: Panacea or Pandora’s Box for Firm Performance

A Review of Employee Stock Option Plans: Panacea or Pandora’s Box for Firm Performance

Corporate governance, performance and take-overs: an empirical analysis of UK mergers

Executive Compensation: A Survey of Theory and Evidence

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