Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

Executive Compensation, Strategic Competition, and Relative Performance Evaluation: Theory and Evidence

Rajesh K. Aggarwal and Andrew A. Samwick
The Journal of Finance
Vol. 54, No. 6 (Dec., 1999), pp. 1999-2043
Published by: Wiley for the American Finance Association
Stable URL: http://www.jstor.org/stable/797986
Page Count: 45
  • Read Online (Free)
  • Download ($33.95)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Executive Compensation, Strategic Competition, and Relative Performance Evaluation: Theory and Evidence
Preview not available

Abstract

We examine compensation contracts for managers in imperfectly competitive product markets. We show that strategic interactions among firms can explain the lack of relative performance-based incentives in which compensation decreases with rival firm performance. The need to soften product market competition generates an optimal compensation contract that places a positive weight on both own and rival performance. Firms in more competitive industries place greater weight on rival firm performance relative to own firm performance. We find empirical evidence of a positive sensitivity of compensation to rival firm performance that is increasing in the degree of competition in the industry.

Page Thumbnails

  • Thumbnail: Page 
1999
    1999
  • Thumbnail: Page 
2000
    2000
  • Thumbnail: Page 
2001
    2001
  • Thumbnail: Page 
2002
    2002
  • Thumbnail: Page 
2003
    2003
  • Thumbnail: Page 
2004
    2004
  • Thumbnail: Page 
2005
    2005
  • Thumbnail: Page 
2006
    2006
  • Thumbnail: Page 
2007
    2007
  • Thumbnail: Page 
2008
    2008
  • Thumbnail: Page 
2009
    2009
  • Thumbnail: Page 
2010
    2010
  • Thumbnail: Page 
2011
    2011
  • Thumbnail: Page 
2012
    2012
  • Thumbnail: Page 
2013
    2013
  • Thumbnail: Page 
2014
    2014
  • Thumbnail: Page 
2015
    2015
  • Thumbnail: Page 
2016
    2016
  • Thumbnail: Page 
2017
    2017
  • Thumbnail: Page 
2018
    2018
  • Thumbnail: Page 
2019
    2019
  • Thumbnail: Page 
2020
    2020
  • Thumbnail: Page 
2021
    2021
  • Thumbnail: Page 
2022
    2022
  • Thumbnail: Page 
2023
    2023
  • Thumbnail: Page 
2024
    2024
  • Thumbnail: Page 
2025
    2025
  • Thumbnail: Page 
2026
    2026
  • Thumbnail: Page 
2027
    2027
  • Thumbnail: Page 
2028
    2028
  • Thumbnail: Page 
2029
    2029
  • Thumbnail: Page 
2030
    2030
  • Thumbnail: Page 
2031
    2031
  • Thumbnail: Page 
2032
    2032
  • Thumbnail: Page 
2033
    2033
  • Thumbnail: Page 
2034
    2034
  • Thumbnail: Page 
2035
    2035
  • Thumbnail: Page 
2036
    2036
  • Thumbnail: Page 
2037
    2037
  • Thumbnail: Page 
2038
    2038
  • Thumbnail: Page 
2039
    2039
  • Thumbnail: Page 
2040
    2040
  • Thumbnail: Page 
2041
    2041
  • Thumbnail: Page 
2042
    2042
  • Thumbnail: Page 
2043
    2043