Business, Management and Accounting
8 years ago

Executives' Equity Compensation Shapes Corporate Governance, Impacting Shareholders

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Federal Reserve Bank of New York Economic policy review
Executive Equity Compensation and Incentives: A Survey
John E. Core, Wayne R. Guay, David F. Larcker

Paper Summary

Executive equity compensation and incentives are crucial aspects of corporate governance that impact the economic performance of organizations. Stock-based compensation and incentives for managers are controversial and have generated contradictory findings. Efficient contracts between firms and executives maximize shareholder value by minimizing agency costs. Future research should focus on clarifying the effectiveness of these contracts in different economic contexts.

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