Business, Management and Accounting
8 years ago

CEOs' pay tied to performance boosts shareholder value, study finds.

International Journal of Business Administration
Does CEOs Performance-based Compensation Waits on Shareholders? A Cross National Analysis
Habib Jouber, Hamadi Fakhfakh

Paper Summary

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The study looked at how CEOs' pay based on performance affects shareholders in different countries. They analyzed data from 231 companies in Anglo-American and Euro-continental models from 2004-2008. The results showed that pay tied to performance can benefit shareholders by creating value. However, the impact on long-term shareholder returns varies depending on factors like property rights, ownership restrictions, governance quality, investor protection, and legal systems.