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Agency Theory and the Motivational Effect of Management Compensation: An Experimental Contingency Study
Agency research has concluded that executive compensation through fixed salary promotes managerial opportunism, whereas equity ownership promotes managers' compliance with stockholders' interests. Using an experimental design, this study examined the extent to which these motivational effe...
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Published in: | Group & organization management 1992-09, Vol.17 (3), p.309-330 |
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Main Authors: | , |
Format: | Article |
Language: | English |
Subjects: | |
Citations: | Items that this one cites |
Online Access: | Get full text |
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Summary: | Agency research has concluded that executive compensation through fixed salary promotes managerial opportunism, whereas equity ownership promotes managers' compliance with stockholders' interests. Using an experimental design, this study examined the extent to which these motivational effects of compensation are conditioned by the level of board control and conditions in the managerial labor market. Participants' opportunistic behavior was negatively affected by the level of board control. This effect was reinforced by high fixed salary compensation and favorable conditions in the managerial labor market. |
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ISSN: | 1059-6011 1552-3993 |
DOI: | 10.1177/1059601192173009 |