Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/147839 
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers No. 10153
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Contrary to previous literature we hypothesize that labor's interest may well – like that of shareholders – aim at securing the long-run survival of the firm. Consequently, employee representatives on the supervisory board could well have an interest in increasing incentive-based compensation to avoid management's excessive risk taking and short-run oriented decisions. We compile unique panel data on executive compensation over the periods 2006 to 2011 for 405 listed companies and use a Hausman-Taylor approach to estimate the effect of codetermination on the compensation design. Finally, codetermination has a significantly positive effect on performance-based components of compensation, which supports our hypothesis.
Subjects: 
executive compensation
board representation
principal-agent theory
corporate finance
Hausman-Taylor
JEL: 
J52
L20
G32
M12
C33
Document Type: 
Working Paper

Files in This Item:
File
Size
161.51 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.