Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/114173
Authors: 
Dyballa, Katharina
Kraft, Kornelius
Year of Publication: 
2015
Series/Report no.: 
ZEW Discussion Papers 15-053
Abstract: 
Contrary to previous literature we hypothesize that interests of labor 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 excessive risk taking and short-run orientated 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
Codetermination
Principal-Agent Theory
Corporate Governance
Hausman-Taylor
JEL: 
J52
L20
G32
M12
C33
Document Type: 
Working Paper

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