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Invisible Hand or Invisible Handshake? The Impact of Market Forces and Market Power on Executive Compensation

Übersicht
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Universität Zürich > Wirtschaftswissenschaftliche Fakultät > Organisation und Unternehmenstheorien, Institut für > Prof. Dr.
Osterloh Rost
Completed Research Project

Title / TitelPDF
Invisible Hand or Invisible Handshake? The Impact of Market Forces and Market Power on Executive Compensation
Summary / Zusammenfassung
The aim of our research is to shed some light on the academic debate of increasing executive compensation by contrasting two possible explanations.
• The market-approach assumes that growth of executive compensation is driven by optimal contracts and market forces.
• The managerialism-approach assumes that growth of executive compensation is driven by an increasing market power of management.
We focus on these two explanations because they imply different future recommendations. If executive compensation growth is driven by optimal contracts and market forces, the market approach recommends tightening control by shareholders, that is, to optimise arm’s length contracting. However, if growth of executive compensation is driven by an increasing market power of management, the managerialism approach suggests that the external measures must be supplemented or even replaced by internal behavioural incentives.
Project Leadership and Contacts /
Projektleitung und Kontakte
Frau, Prof. Dr. (Project Leader)
Frau, Dr. (Project Leader)
Funding Source(s) /
Unterstützt durch
Foundation

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