CEO Incentive Plans Improvement in the U.S. Public Companies on the Base of Game Theoretical Modeling

Authors

  • Ekaterina M. Syrunina Saint Petersburg State University
  • Boris V. Yanauer Saint Petersburg State University

Abstract

The paper is aimed at improving the mechanism of forming the variable part of CEO compensation. The novelty of the given research paper is improving the methodology of evaluation the value of variable part of CEO compensation with the chosen model, so it can be applied on practice. The model is game theoretical interpretation of the principal-agent phenomenon whose objective is to model the variable part of CEO compensation to stimulate strategy implementation In detail, 14 company cases of the U.S. public companies in retail and technology industries were presented, the applicability of the model was proven and suggestions for methodology improvement were made.

Keywords:

corporate governance, agency problem, CEO compensation, game theory, theoretical modeling, U.S. public companies

Downloads

Download data is not yet available.

References

Baker, G., Hall, B. (2004). CEO Incentives and Firm Size. Journal of Labor Economics, 768–798.

Bebchuk, L., Fried, J. (2003). Executive Compensation as an Agency Problem. Journal of Economic Perspectives, 17(3), 71–92.

Casamatta, C., Guembel, A. (2010). Managerial Legacies, Entrenchment and Strategic Inertia. The Journal of Finance, 65(6), 2403–2436.

Core, J., Guay, W. (2010). Is CEO Pay Too High and Incentives Too Low? A Wealth-Based Contracting Framework. Academy of Management Perspectives, 24(1), 5–19.

Dow, J., Raposo, C. (2005). CEO Compensation, Change, and Corporate Strategy. Journal of Finance, 2701–2727.

Edmans, A., Gabaix, X., Landier, A. (2009). Multiplicative model of optimal CEO incentives in market equilibrium. The Review of Financial Studies, 22, 4881–4917.

Forrester, C., Ferber, S. Fiduciary Duties and Other Responsibilities of Corporate directors and officers. RR Donnelley, 1–164.

Frydman, C., Jenter, D. (2010). CEO Compensation. Annual Review of Financial Economics, 2, 75–102.

Frydman, C., Saks, R. (2010). Executive Compensation: A New View from a Long-Term Perspective, 1936–2005. The Review of Financial Studies, 23(5), 2099–2138.

Gutierrez-Urtiaga, M. (2000). Managers and Directors: a Model of Strategic Information Transmission / M. Gutierrez-Urtiaga. Centro de Estudios Monetarios Y Financieros.

Hermalin, B. E. (2005). Trends in corporate governance. The Journal of Finance, 60(5), 2351–2384.

Holmstroem, B. (1979). Moral Hazard and Observability. The Bell Journal of Economics, 10(1), 74–91.

Inderst, R., Mueller, H. M. (2005). Incentives for CEOs to exit. NYU Working Paper, 14(5), 39–58.

Milgrom, P., Roberts, J. (1992). Economics, Organization and Management. Prentice Hall.

Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors / M. E. Porter. New York: Free Press.

Ross, S. (1973). The Economic Theory of Agency: The Principal's Problem. American Economic Review, 63(2), 134–139.

Downloads

Published

2022-05-01

How to Cite

Syrunina, E. M., & Yanauer, B. V. (2022). CEO Incentive Plans Improvement in the U.S. Public Companies on the Base of Game Theoretical Modeling. Contributions to Game Theory and Management, 9. Retrieved from https://gametheory.spbu.ru/article/view/13358

Issue

Vol. 9 (2016)

Section

Articles

License

Articles of "Contributions to Game Theory and Management" are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.