Business, Management and Accounting
4 years ago

Bank-appointed monitors in Japan reduce executive pay tied to firm performance.

RePEc: Research Papers in Economics
Executive Pay in Japan: The Role of Bank-Appointed Monitors and the Main Bank Relationship
Naohito Abe, Noel Gaston, Katsuyuki Kubo

Paper Summary

Related papers

Business, Management and Accounting
4 years ago

Optimal delegation of authority boosts efficiency and decision-making in corporations.

Corporate Governance
Market Dynamics
Mechanism Design
1 view
Business, Management and Accounting
4 years ago

Diversification in Crisis: More Risk for Less-Developed Countries' Firms.

Corporate Governance
International Finance
2 views
Business, Management and Accounting
4 years ago

High debt reliance led to excessive investments, weakening Malaysian corporate governance.

Islamic Banking
Corporate Governance
Financial Management

Executive pay in Japan is influenced by both worker wages and firm performance. Bank-appointed monitors can reduce the impact of firm performance on executive pay and decrease the importance of promotion tournaments. A study of 56 Japanese electronics firms found that having outside monitors, like bank-appointed Board members, helps oversee top executives and that tournament-based incentives are significant in Japan's executive compensation practices.